It was inevitable. Nokia this morning announced plans to ‘align its global workforce and consolidate site operations’. That means significant layoffs and reorganizations across the board, of course, so here are the details:
First off, Nokia will be cutting its workforce by roughly 4,000 employees by the end of 2012.
The majority of job cuts will be in the company’s home country Finland, as well as Denmark and the UK. Discussions with employee representatives started today, Nokia says.
Accenture will, in turn, provide mobility software services to Nokia for future smartphones.
On March 31, 2011, Nokia says it employed a total of 130,951 people (of which 5,642 were employed by NAVTEQ and 66,229 were employed by Nokia Siemens Networks).
Nokia employs about 12,000 people in Finland alone – 1,400 of those will be cut.
All employees affected by the reduction plans can opt to remain on the Nokia payroll through the end of 2011. The company says it expects cuts to occur in phases until the end of next year, linked to the roll-out of its planned product and services portfolio.
Nokia aims to reduce its Devices & Services operating expenses by 1 billion euros for the full year 2013 in comparison to the full year 2010, as previously announced.
Update: The Register obtained an internal memo.
Nokia adds that it plans to “consolidate the company’s research and product development sites so that each site has a clear role and mission”. This will result in the contraction or closure of some sites, although the company leaves the door open for expansion of other sites.
Nokia has long been struggling to come up with a solid answer to Apple’s iPhone and the steamroll that is Android in the global smartphone segment, which is the main reason for its continued decline. Question is if it will ever be able to make a comeback.
Said Stephen Elop, Nokia president and CEO:
“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.”
Accenture and Nokia have been working together since 1994. In October 2009, Accenture acquired Nokia’s professional services unit that provides engineering and support of the Symbian operating system to mobile device manufacturers and service providers, and which then served as a ‘key building block’ in Accenture’s Mobility services portfolio.
Nokia last week reported its earnings for the first quarter of 2011. Profit declined 1.4 percent year-over-year, and the company offered a bleak outlook for the second quarter of 2011: Nokia said it expects operating margins from its handset business to slip in Q2.
(Hat tip to Tim Weber)