Nokia transfers 3,000 employees to Accenture; plans to cut 4,000 jobs by end 2012
Moneylife Digital Team 27 April 2011

Transfer of 3,000 employees involved in Symbian software activities may be a signal of the end of the OS that has been associated with Nokia for ages. Rival Apple's iOS and Google's Android have taken an unbeatable lead in smartphones and software, and Nokia is trying to regain market share with its new partner, Microsoft and Windows Phone 7

Nokia, the largest handset seller in the world, today said it would cut its global workforce by around 4,000 employees by the end of 2012, with the majority of reductions in Denmark, Finland and the United Kingdom. In addition, the company has entered a strategic collaboration, which would result in the transfer of its Symbian software activities, together with about 3,000 employees, to Accenture.

Stephen Elop, president and chief executive, Nokia, said, “At Nokia, we have new clarity around our path forward, which is focused on our leadership across smart devices, mobile phones and future disruptions. However, with this new focus, we also will face reductions in our workforce. This is a difficult reality and we are working closely with our employees and partners to identify long-term re-employment programs for the talented people of Nokia.”

In accordance with country-by-country legal requirements, discussions with employee representatives started today. Nokia also plans to consolidate the company’s research and product development sites so that each site has a clear role and mission. Nokia expects the expansion of some sites and the contraction or closure of others, the company said in a statement.

All employees affected by the reduction plans can stay on the Nokia payroll through the end of 2011. Nokia said it expects personnel reductions to occur in phases until the end of 2012, linked to the rollout of the company's planned product and services portfolio. During this period, the mobile handset producer said it intends to ramp up its capacity for the development of Nokia smartphones based on the Windows Phone platform, the company's broad range of mobile phones and its services portfolio.

Nokia, which has been using Symbian as the preferred operating system (OS), has seen its market share falling, especially after the launch of Apple iPhone in 2007 and the subsequent arrival of Google's Android OS. Nokia sold 24.2 million smartphones in the first quarter of 2011, up 13% on a year-on-year basis, but 14% down quarter-on-quarter. During the first quarter Nokia's total mobile device volumes increased marginally to 108.5 million units from 107.8 million units in the corresponding period a year ago.

Although Nokia is still the world’s largest mobile device maker, its market share, especially in the smartphone category has been falling over the years. While the world was going gaga over the Apple iPhone and iOS, and Google's Android OS, Nokia preferred to stick with its tried and tested Symbian OS. Unfortunately, in the competitive environment of smartphones, Symbian proved to be a non-performer.

Many experts have opined that Symbian was never the competitor to the mighty iOS and Android-based devices. No doubt, Symbian as a basic OS for a mobile device is very user friendly, but when it comes to an OS for a smartphone, it just could not meet the expectations of running multi-task applications.

According to a report published by Appcelerator-International Data Corporation (IDC), the developer momentum around the world is shifting back toward Apple, as fragmentation and tepid interest in current Android tablets chip away at Google's recent momentum gains. Partly as a result of Microsoft's partnership announcement with Nokia, the Windows Phone 7 interest fell four points below BlackBerry, making Microsoft the new number three in developer interest behind Apple and Google.

After the agreement between Nokia and Microsoft, it was expected that Symbian would be left to die a natural death. Instead, Nokia has given it an extension with the transfer to Accenture.

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