UPDATED: With Nokia’s agreement with Microsoft signed, the big work of restructuring the company accordingly has begun. Nokia said today it will outsource Symbian development to Accenture, transferring 3,000 employees who worked on the development of the platform. It also announced its largest jobs cuts in history, with plans to shed another 4,000 jobs by the end of 2012, mostly in the U.K., Denmark and Finland, where 1,400 jobs will be cut.
The job cuts and restructuring, largely in research and development, will help Nokia cut its Devices & Services operating expenses by €1 billion ($1.46 billion USD) for 2013. It will also prepare the company for its future as it pins much of its hopes on a strategy around Windows Phone 7 for its top smartphones. By outsourcing Symbian, Nokia is distancing itself from its longtime operating system, which, until recently, was the world’s best-selling smartphone platform.
In November, it took back control of the Symbian platform, demonstrating a commitment to the operating system. Now it will now look to long-time partner Accenture to push Symbian development ahead. Under the deal, Accenture will be a preferred partner for Nokia’s smartphone development activities and will also provide mobility software, business and operational services around the Windows Phone platform to Nokia and other ecosystem participants. Accenture has worked with Nokia since 1994, and in 2009, acquired Nokia’s professional services unit which provides engineering and support for Symbian for device manufacturers and operators.
“This collaboration demonstrates our ongoing commitment to enhance our Symbian offering and serve our smartphone customers,” said Jo Harlow, executive vice president for Smart Devices at Nokia. “As we move our primary smartphone platform to Windows Phone, this transition of skilled talent to Accenture shows our commitment to provide our Symbian employees with potential new career opportunities.”
The move to outsource Symbian is not surprising. With Nokia migrating to Windows Phone 7, it makes sense to focus its efforts there and offload research and development to Accenture. But it’s still pretty amazing to see Nokia transferring what has been a market leader for so long and a key to its success for many years. It shows how committed Nokia is embracing a future beyond Symbian. An internal memo obtained by The Register shows Nokia’s larger strategy for the platform:
“The aim is that Symbian software development-related activities would [sic] continue within Accenture for as long as needed, as well as other mobility projects serving other Accenture clients. In addition, Nokia’s portfolio of Symbian devices will gradually be reduced and eventually be discontinued, in line with the ramp up of the availability of Nokia devices based on the Windows Phone platform,” the memo said. ”Towards 2013 and beyond, activities will focus on the maintenance of the remaining products on the market.”
UPDATE: The Register confirmed the cuts were primarily in R&D and that existing research sites will be targeted based on “existing concentrations and the close proximity of suppliers.” Finland will not close any sites, but will shed 1,400 jobs, while 950 employees in Copenhagen, Denmark will be cut, as will 300 in Bangalore, India and 500 in the U.S. Nokia plans on moving all North American sales operations to Sunnyvale, Calif., which will become the headquarters for Nokia’s North American sales and marketing teams. The Register also reported that Nokia’s memo reported the majority of MeeGo activities are planned to be discontinued by the end of June 2012. “The Windows Phone organization has started to ramp up its operations and a large part of that organization will be in place by the end of 2011, and Nokia aims to retain as many people as possible from other areas, such as the Symbian and MeeGo organizations.”
Nokia will retain the Symbian intellectual property and will continue to make it available to platform developer partners. Nokia still plans on selling some 150 million more Symbian phones. But the writing on the wall is clear: The future is not in Symbian. Now Nokia needs to nail its Windows Phone 7 strategy, which is a tall order in a world led by Android and iOS.