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Nokia Cuts 7,000 Jobs Due To Bad Quarter

Nokia has been through a lot of waves recently, and today the world knows the outcome. Nokia has announced today it will cut 7,000 jobs as a “result of its Microsoft Windows Phone agreement” and outsourcing Symbian handset software. This represents 12% of the company’s handset employees and will likely save Nokia $1.5 billion dollars.

Nokia’s CEO, Stephen Elop noted that the competitive environment has changed rapidly, implying that Nokia must change with it in order to be successful. The cuts include 4,000 layoffs and 3,000 job shifts to Accenture. Nokia is currently the largest handset maker in volume, only.

The former Microsoft executive and current Nokia president was hired a year ago to make Nokia more competitive against Apple’s iPhone. Accenture is a services company that will now support Symbian software, in addition to future Windows Phone handsets. The outsourcing deal will save Nokia over 1 billion euros, and represent 18% of annual research and development costs. Although the announcement had increased Nokia’s shares by 3%, the move prompted the company’s supplier, Tieto to have its stock value drop. This move will no doubt have an impact on our economy, but unfortunately this is one of the by products of a recession. I am not sure Nokia’s future is a bright one, but I wish them the best.

Photo Courtesy of John Karakatsanis
Photo Courtesy of MatthewS