Nokia to Outsource Symbian to Accenture, Lay Off 4,000

Nokia, in an effort to cut expenses by more than $1.4 billion, is letting go of 4,000 employees and plans to send another 3,000 workers to Accenture, which will oversee Symbian.

Nokia has announced plans to outsource its Symbian software activities to consulting firm Accenture, which also will take on about 3,000 Nokia employees. In a separate statement April 27, Nokia also announced plans to reduce its global workforce by an additional 4,000 employees by the end of 2012, as it seeks to reduce its operating expenses by more than $1.4 billion for the full year 2013.

The majority of the reductions will be to staff in Denmark, Finland and the United Kingdom. The phone maker also plans to consolidate its research and development sites so that "each site has a clear role and mission," the company added in a statement. The move will result in the expansion of some sites and the shrinking or closing of others.

In recent quarters, Nokia has struggled to maintain its mobile-device leadership role against Apple and the growing number of competitors releasing Android-running smartphones. Its steadfast allegiance to the Symbian OS-which recently lost its longtime majority worldwide market-share position to Android-has been largely blamed for the company's struggles. In February, new Nokia CEO Stephen Elop, who came to the company from Microsoft, took the drastic measure of announcing that Nokia's primary focus would shift from Symbian to Microsoft's Windows Phone OS, though Nokia would continue to see through some Symbian projects and to support the OS for a time.

"At Nokia, we have new clarity around our path forward, which is focused on our leadership across smart devices, mobile phones and future disruptions," Elop said in an April 27 statement.

The new focus, he added, has led to the "difficult reality" of necessitating workforce reductions, though the company is "working closely with our employees and partners to identify long-term re-employment programs for the talented people of Nokia."

All employees affected by the job losses will be allowed to stay on the Nokia payroll through 2011, and the company is additionally offering individual employment support and retraining, as well as "working with a variety of partners to create new opportunities," Elop said.

The transition of the 3,000 Nokia employees-from China, Finland, India, the United States and the United Kingdom-to Accenture is expected to be completed by the end of 2011, as Nokia finalizes its agreement with the company this summer.

"Mobility is a key area for Accenture," Marty Cole, CEO of Accenture's Communications and High Tech group, said in the statement. "This collaboration with Nokia will enhance our ability to help clients across multiple industries leverage mobility to advance their business agendas. It is a real win-win for Accenture and Nokia."

At Accenture, the Nokia employees will work on "Symbian software activities for Nokia," said the statement, and over time, the two companies will work to retrain and redeploy the employees. A good bet is this will happen by 2014. In an April 14 report on Australia IT, Nokia Australia Managing Director Chris Carr said that Nokia is contractually obligated to support its devices for two years after their release.

Nokia introduced two new Symbian-running phones, the X7 and the E6, April 12, and has committed to introducing additional Symbian devices in 2012. The two new phones (shown here) run an updated version of Symbian nicknamed "Anna." In a controversial move, Nokia acknowledged that while Symbian has long been celebrated for its open-source nature, this is no longer the case. New versions of Symbian will reportedly be alphabetical women's names, similar to Google's dessert code names for Android versions.

Earlier this month, to the additional surprise of industry followers, Nokia announced a small gain while unveiling its first-quarter financial numbers. The company shipped 108.5 million units during the quarter, for a rise of 1 percent year-over-year.