Nokia’s transition from Symbian to Windows Phone 7 has spelled not only a massive 7,000 job cut for its employees worldwide, but also the shutting down of their research and development site in White Plains, New York with a certain, expected flux in the employment in the rest of their R&D sites worldwide. This is all part of the efforts they must take to prepare for the exclusive use of Windows Phone 7 on all Nokia handsets. The complete change over is expected to take years as they phase out of the Symbian handset.
Losing out on the smart phone hype that gripped rivals to take the opportunity and profited off it, Nokia is trying to stage a comeback by chalking up a partnership deal with Microsoft that was eventually finalized just last week. The deal has Nokia stating that they will use the software company’s Windows Phone 7 operating system in lieu of Symbian, which they had created, in a move to further increase their share in markets they have established their presence in and win over those who have yet to acknowledge them. Nokia has a single digit market share in the US and has been on a decline for the past few years.
A blow to Finland that lists an 8% unemployment rate, Nokia has also made a deal with outsourcer Accenture to take over the development and future support for Symbian, including providing employment for 3,000 of those laid off, most of which had been working on Symbian. Accenture says that the 3,000 employees would work on Symbian for a while, before they will be retrained and redeployed.
Nokia’s investors applaud the effort of transferring a part of the workers, a procedure that will cost the company less than a flat-out layoff that requires paying out severance packages. Nokia CEO Stephen Elop has admitted that it was a hard decision, to be officialized once the company finishes talks with labor representatives. The rest of the 4,000 workers are to remain on their payroll for the rest of 2011. How many will remain into 2012 has not been stated.
In spite of shipping almost 110 million phone units last year, the slimmer profit margins of lower-end handsets has Nokia conceding first place to Apple in terms of revenue. The job cuts, which represents about 12% of its total phone unit workforce is seen to save the company 1 billion euros ( 1.4 billion USD) by the end of 2012 along with the Microsoft deal.
The recent layoffs aren’t the largest seen from Nokia, the company notable for cutting out 9,000 of its employees when they began their telecommunication Nokia Siemens Network.