Helsinki: Nokia will axe 7,000 jobs and outsource its legacy Symbian activities to slash €1 billion ($1.46 billion) of costs as it struggles to compete in the fierce smartphone market.
Nokia, the world’s largest phone maker by volume, on Wednesday detailed an overhaul of its business that will include laying off 4,000 staff and transferring another 3,000 to technology services firm Accenture - a total 12% of its phone unit workforce.
Accenture will take over Nokia’s legacy Symbian software activities and support future smartphones, including those running on Microsoft’s Windows platform.
The deal enables Nokia to cut annual business research and development costs by €1 billion, or 18%, by 2013 from €5.65 billion in 2010.
To turn around its fortunes, Nokia unveiled a deal in February to start using Microsoft software instead of its own Symbian platform. Its market share in smartphones has fallen sharply over the past few years as it loses out to Apple and other manufacturers of high-end handsets.
“Restructuring had been widely expected but Nokia will be hoping that the transfer of 3,000 of jobs to Accenture will help cushion the blow as it ramps down its Symbian investments,” said Ben Wood, head of research at CCS Insight.
Nokia said most of the 4,000 layoffs will take place in Finland, Denmark and Britain, with all workers staying on the payroll through 2011.
In its native Finland, Nokia will cut 1,400 jobs.
“This went slightly better than expected, because Nokia transfers Symbian development. These 1,400 people to be laid off are mainly MeeGo coders and they should have quite good chances to find new jobs,” said Pertti Porokari, chairman of the Union of Professional Engineers in Finland.
Nokia’s telecom gear arm Nokia Siemens Networks cut around 9,000 jobs after it started operations in 2007.