In March came the announcement of Nokia's new strategy to phase out the Symbian operating system and focus on Microsoft's Windows Phone. Now comes some of the hard reality of the change.
The Finnish phone maker announced today that it's transferring 3,000 Symbian employees to consulting firm Accenture and cutting an additional 4,000 by the end of 2012. Most of the cuts will affect employees in Denmark, Finland, and the U.K.
The cuts are necessary for the company's new focus on smartphones and "future disruptions," Chief Executive Stephen Elop said in a statement. "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."
The job cuts and Accenture deal are part of a Nokia plan to reduce operating expenses for devices and services by 1 billion euros, or $1.46 billion, for 2013 compared to 2010.
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Under the deal with Accenture announced today, Accenture's Communications and High Tech Group will take over delivering and supporting the mobile OS. Accenture, which already has 215,000 employees, also will provide software and services involving Windows Phone to Nokia and others.
"With the influx of highly qualified talent from Nokia, Accenture can help our clients rapidly leverage mobility to advance their business strategy," said Marty Cole, group chief executive of the Accenture unit absorbing the employees. "One of our areas of focus is mobility software, where we provide engineering consulting and product development services to mobile phone manufacturers, chip manufacturers, and mobile operators worldwide."
How Symbian got sidetracked
Terms of the Accenture deal weren't announced. However, Nokia spokeswoman Jennifer Lyons said the company is keeping the Symbian intellectual property.
"The scope of the agreement with Accenture is to outsource development of Symbian software activities to help us deliver the 150 million more Symbian smartphones we expect to sell, but does not involve the transfer of platform ownership or intellectual property," Lyons said. "We will continue to make the Symbian platform available to platform developer collaborators at http://symbian.nokia.com."
The move begins a sad chapter in Symbian's history. Years ago, the operating system--and Nokia--were at the center of the smartphone revolution. But with the arrival of Apple's iOS-powered iPhones, and later of Google's Android, the United States moved from smartphone laggard to leader; last week, Apple's phone revenue exceeded Nokia's. An effort to improve Symbian's relevance by making it open-source software largely failed.
In the new era, attracting outside programmers became paramount as purchasing a smartphone became a decision that involved an entire ecosystem of software, not just a phone and its built-in features. Nokia hired Elop from Microsoft in 2010, and this year he announced Nokia is pinning its turnaround hopes on an effort to help make Windows Phone into a viable competitor to iOS and Android.
Alas for Nokia and Microsoft, there's a lot of work to be done. Windows Phone 7 is judged a to be a reasonable operating system, but developers are focused on iOS and Android to the detriment of WP7, updated Appcelerator survey data released yesterday show.
Symbian still is a factor at Nokia, which plans to sell 150 million Symbian devices in the future.
But it's clear Nokia is trying to become less encumbered by its old strategies and their expenses.
"As we move our primary smartphone platform to the Windows Phone platform, the transition of skilled talent to Accenture...shows our commitment to provide our Symbian employees with potential new career opportunities," said Jo Harlow, Nokia's executive vice president for smart devices.
As for the 4,000 losing their jobs, Nokia will try to cushion the blow.
"All employees affected by the reduction plans can stay on the Nokia payroll through the end of 2011. Nokia expects personnel reductions to occur in phases until the end of 2012, linked to the roll-out of Nokia's planned product and services portfolio," Nokia said.
Updated 2:33 a.m. PT and 3:27 a.m. PT with further information on Nokia's cost-cutting efforts and the Accenture partnership.