Two big steps for Nokia (NYSE: NOK) today in its ongoing strategic shift: the company announced it would transfer all Symbian software operations to Accenture, including the 3,000 people that work in the division. It also said that it would begin a massive wave of layoffs that will total 4,000 people by the end of 2012. The news comes a week after the company announced a signed deal with Microsoft (NSDQ: MSFT) to use its Windows Phone 7 operating system as the basis for its smartphones in the future, amid big sales declines for the world’s largest handset maker.
No specific financial terms were given for either announcement but they will go some significant way towards Nokia’s aiming to reduce its operating expences by €1 billion ($1.5 billion) by fiscal year 2013.
Symbian: The outsourcing deal with Accenture transfers all of Symbian’s software activities to the systems integrator. That will include 3,000 people who currently work on Symbian for Nokia. As part of the agreement, Accenture will continue to provide Nokia with the Symbian platform, and all related services.
Given Nokia’s strategic and operational shift to Windows Phone 7 as the main platform for its smartphone portfolio — and, importantly, viewing itself as a handset maker, not a software designer — it’s not a surprise that it is giving up on driving Symbian to the next stage of its life. It’s not giving up on Symbian altogether, though: Nokia intends to continue using Symbian at least until next year, and may even continue to use it in certain smartphones beyond then. After all, even if Symbian’s not worked out in some markets, like the U.S., it has a huge number of users and supporters elsewhere.
Nor is it a surprise that Nokia chose Accenture above other systems integrators when it decided to consider outsourcing: Accenture already manages part of the Symbian platform on behalf of the company. In 2009, it took over Nokia’s professional services unit, which provides Symbian engineering and support service providers (presumably when customising Symbian devices for particular, operator-specific services).
There is another connection, too: David Wood, one of Accenture’s senior consultants in its embedded mobility services division — where the current Symbian operations reside — was the EVP and head of research for Symbian until October 2009. He joined Accenture in May 2010, and it looks like he will be closely involved with Symbian again. “No longer need to sidestep questions about spending so much time in Finland,” he tweeted earlier today.
Layoffs: The company is targeting to lay off 4,000 employees by the end of 2012. The majority of reductions, it says, will be in the UK, Denmark and Finland, and consultations around this began today.
As part of this the company will also be restructuring its R&D, consolidating/refocussing some operations and closing others. No details on what exactly this will mean yet but will presumably mean more people placed on the project of integrating WP7 into the devices already planned for Nokia’s roadmap.
Nokia says employees can “stay on the Nokia payroll through the end of 2011.”
“At Nokia, we have new clarity around our path forward, which is focused on our leadership across smart devices, mobile phones and future disruptions,” said Stephen Elop, Nokia president and CEO, in the release. “However, 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 programs for the talented people of Nokia.”