The world’s leading cellphone-maker, Nokia, said on Wednesday it would cut 4 000 jobs and outsource another 3 000 in a restructuring aimed at stopping the haemorrhaging of its market share.
The plan includes the closure of a number of sites in Europe and North America and the transfer by the end of this year of Nokia’s Symbian smartphone platform operations, including 3 000 employees, to United States-based global consulting firm Accenture.
“In addition, Nokia also plans to reduce its global workforce by about 4 000 employees by the end of 2012, with the majority of reductions in Denmark, Finland and the United Kingdom,” the company said, later adding that this also includes shedding hundreds of jobs in the US and India.
The news sparked a rally of Nokia shares, which rose 3,19% to €6,15 in late afternoon trading on a Helsinki market up just 0.29%.
The large-scale layoffs had been expected since chief executive Stephen Elop announced in February that Nokia would abandon Symbian in favour of a tie-in with the Microsoft Phone platform, but Wednesday’s announcement marked the first time the company indicated how many jobs would be axed.
“This is a difficult reality, and we are working closely with our employees and partners to identify long-term re-employment programmes for the talented people of Nokia,” Elop said in a statement.
‘Full disclosure’
He later told reporters at Nokia’s headquarters in Espoo, outside Helsinki, that the company had considered gradually revealing the extent of the lay-offs, “in pieces”, but “we decided no … If we believe that’s what is going to happen then we should provide full disclosure for all of these moves.”
He said that the company had no plans to cut more jobs further down the line, adding that this was the “full plan for as far as we can see into the future”.
Last week, Nokia said it was planning to reduce operating costs by €1-billion by 2013 compared with its 2010 level through corporate restructuring and job cuts, but added that all employees affected by the cuts could remain on the payroll until the end of this year.
Current Nokia employees working with Symbian in Finland, China, India, Britain and the US will be transferred to Accenture, the company said.
Chief shop steward at Nokia’s largest Symbian development centre in Tampere, Kalle Kiili, said that the long-awaited details were better than he expected.
“There were fears that because we have a North American CEO, that product development would weaken considerably in Finland, but we’re only losing 1 400 jobs,” Kiili said, adding that this figure would undoubtedly have been higher than 2 000 without the transfer of jobs to Accenture.
Kiili welcomed the outsourcing news as well, saying that Accenture was a responsible and well-respected employer.
Closures
But although Nokia’s Finnish employees breathed a sigh of relief that no Finnish sites would be shut down, Elop announced the closure of Nokia’s Copenhagen site, with a loss of 950 jobs, in addition to the closure of three sites in Britain and one in the US by the end of 2012.
By the end of this year, a research and development site in Romania will also be shut down, he said.
“None of the Nokia factories are affected,” Elop noted.
Nokia’s new strategy to stop developing its own Symbian smartphone platform and launch a partnership with Microsoft, Elop’s previous employer, marks a radical effort to stop bleeding out market share to RIM’s Blackberry, Apple’s iPhone and handsets running Google’s Android platform.
The former undisputed world leader has seen its market share fall to 29% in the first quarter of this year compared with a peak of 40% in the first half of 2008. — AFP