Here’s the cloud to Nokia’s silver lining statement the other day of better than expected handset sales: it is cutting IT 300 jobs, and outsourcing 820 more, with Indian outsourcing giants HCL and Tata Consultancy Services picking up the reins for the latter. The news was announced this morning by the company as it gears up to report Q1 results January 24.
Nokia says that these are part of a bigger set of cost reductions that it announced in June 2012. At the time it had announced it would lay off 10,000 people as part of that process.
Nokia says that these are the final layoffs related to that announcement. But that doesn’t mean that it’s finished cost cutting altogether; there may yet be further cuts as the company continues to reduce costs and downsize to fit the fact that it is no longer the world’s biggest handset maker, and that its device sales have, overall, declined significantly in the last several years. Nokia has in total laid off nearly 16,000 people in its mobile and location division since CEO Stephen Elop took over in 2010; it now has around 44,600 employees working in it.
There are small signs that Nokia is slowing turning things around: on January 10, the company released preliminary Q4 numbers that indicated that it had sold 4.4 million units of its new line of Lumia Windows Phone devices in the quarter, roughly twice the number of smartphones built on its legacy Symbian platform that it has slowly been phasing out of use. But given that the quarter covering Thanksgiving and Christmas is traditionally a strong period for handset makers, Nokia also warned of tough times in Q1 .
While June’s announcement referred to jobs in handset operations in Canada, German and its home market of Finland, today’s round of cuts is around the company’s IT operations, which are now being right-sized to the new remit of the company, Nokia says.
“Nokia believes these changes will increase operational efficiency and reduce operating costs, creating an IT organization appropriate for Nokia’s current size and scope,” the company writes in its statement. The majority of these cuts announced today will be in Finland.
As with those engineers and others that have already been cut from operations like Nokia’s now-outsourced Symbian mobile platform, and its abandoned MeeGo effort, IT employees, it says, will also be eligible for funds from its Bridge program — an incubator Nokia has created specifically for funding laid off workers’ ideas for new businesses. Employees get €25,000 to start, with the possibility of funding up to $185,000.
Full statement below. More to come. Refresh for updates
Nokia to align IT function with its business focus
- Planned changes are part of Nokia’s focused strategy announced in June 2012
- Nokia plans to transfer some activities and employees to strategic partners
Espoo, Finland – Nokia outlined a range of planned changes today to streamline its IT organization. Nokia believes these changes will increase operational efficiency and reduce operating costs, creating an IT organization appropriate for Nokia’s current size and scope.
As part of the planned changes, Nokia plans to transfer certain activities and up to 820 employees to HCL Technologies and TATA Consultancy Services.
Nokia also plans to reduce its global IT organization by up to 300 employees. Nokia will offer employees affected by these planned reductions both financial support and a comprehensive Bridge support program. These are the last anticipated reductions as part of Nokia’s focused strategy announcement of June 2012.
The majority of the employees affected by these planned changes are based in Finland. Nokia is beginning the process of engaging with employee representatives on these plans in accordance with country-specific legal requirements..
Nokia is a global leader in mobile communications whose products have become an integral part of the lives of people around the world. Every day, more than 1.3 billion people use their Nokia to capture and share experiences, access information, find their way or simply to speak to one another. Nokia’s technological and design innovations have made its brand one of the most recognized in the world. For more information, visit http://www.nokia.com/about-nokia.