Elop helps 4,000 staff off his 'burning platform' as Nokia slashes jobs
Thursday 28 April 2011
Nokia boss Stephen Elop yesterday fleshed out his plan to salvage the struggling mobile phone group from the "burning platform", revealing that the company was preparing to axe thousands of employees.
Nokia announced that it was to "align its global workforce and consolidate site operations" to help meet the target set last week of slashing €1bn out of the business within two years.
The Finnish group is to cut 4,000 jobs by the end of 2012, and will transfer a further 3,000 to Accenture, which is taking over the running of its operating system Symbian.
The majority of the job cuts will come in Denmark, Finland and the UK, where about 700 of the 2,400 employees will be affected. As part of the move, itsresearch and development site in Farnborough will close. The company began discussions with employee representatives yesterday.
Nokia currently employs almost 131,000 employees around the world, including those working at its joint venture Nokia Siemens Networks and mapping unit Navteq. Mr Elop said there was now "clarity around our pathforward" in attempting to recover some initiative in the smartphone market.
But he added: "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 programmes."
Nokia said employees affected had the option to remain on the payroll to the end of the year, with the cuts coming in phases throughout 2012.
Ben Wood, analyst at CCS Insight, said: "The key question is whether these cuts go deep enough," adding that heexpected more dramatic reductions.
"Nokia has stated that it has no further cuts planned for the foreseeable future, but I can't help wondering whether this is just the start of a long and painful journey as Nokia reshapes itself for life in the post-iPhone world," he said.
The Accenture deal will see employees move from the UK, China, Finland, India, and the US by the end of the year. Nokia has been working with the consulting group since 1994, and sold its professional services business toAccenture two years ago.
Mr Wood said hiving off Symbian was a "smart move" by Nokia. "Running internal development teams concurrently for Symbian and Windows Phone was always going to be a challenge," he said, adding: "There would be little incentive for the Symbian teams to put their hearts and souls into their work. Nokia's management team has made it clear the future lies with Windows Phone and it clearly wants this to be the primary focus internally."
Nokia fully signed off its tie-up with Microsoft last week when Mr Elop also revealed his cost-cutting plans. This came shortly after Apple overtook Nokia on sales for the first quarter.
In February, Mr Elop sent a memo to staff comparing the company to a man on a "burning platform", adding: "We must decide how we are going to change our behaviour."
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