Nokia announced Wednesday that it will cut 4,000 jobs and outsource its Symbian development team to Accenture.
Layoffs will occur on a rolling basis until the end of 2012, during which time Nokia plans to ramp up production of devices based on Microsoft's Windows Phone 7 platform. Most of the affected employees will be in Denmark, Finland, and the UK, and those departing now can stay on the Nokia payroll until the end of 2011.
The company said the move is intended to help it execute a previously announced plan to reduce expenses by 1 billion euros in 2013 compared to 2010. Nokia will also consolidate its research and product development sites "so that each site has a clear role and mission," it said. Nokia said it will expand some sites and shut down others, but did not elaborate.
"At Nokia, we have new clarity around our path forward, which is focused on our leadership across smart devices, mobile phones, and future disruptions," Stephen Elop, Nokia president and CEO, said in a statement. "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."
On the Symbian front, Nokia will transfer 3,000 employees to Accenture, which will also provide mobility software services to Nokia for future smartphones.
Nokia expects to reach a final agreement on the Accenture transfer by the summer, and have everything completed by year's end. Affected employees are in China, Finland, India, the UK, and the U.S., Nokia said. Initially, those workers will focus on Symbian software activities for Nokia, but as the focus moves to Windows Phone, "Accenture and Nokia will seek opportunities to retrain and redeploy transitioned employees," Nokia said.
"As we move our primary smartphone platform to Windows Phone, this transition of skilled talent to Accenture shows our commitment to provide our Symbian employees with potential new career opportunities," said Jo Harlow, executive vice president for Smart Devices at Nokia.
In October 2009, Accenture bought Nokia's professional services unit, which provides Symbian engineering and support.
Last week, Microsoft and Nokia formalized their partnership with a definitive agreement to develop Windows Phone 7-based Nokia devices. The two companies also said they have made "significant progress" in the development of such phones. Nokia and Microsoft first announced plans to work together in early February; a month later, Elop denied that the Microsoft deal would lead to layoffs at Nokia, though "if someone's not succeeding, they need to be helped or they need to be moved along," Elop told Reuters.
But as PCMag mobile analyst pointed out recently, Nokia won't have any Windows Phones ready for at least several months, and there are hundreds of millions of existing Symbian users outside the U.S., so Nokia has committed to upgrading Symbian and releasing new Symbian smartphone models for at least the next two years. Earlier this month, Nokia introduced two new phones and a minor upgrade to the Symbian software.