Nokia to cut 300 staff and outsource 820 jobs as it streamlines its IT operations

Nokia to cut 300 staff and outsource 820 jobs as it streamlines its IT operations

As part of its efforts to reduce its operating costs and streamline its business, Nokia announced today that it will overhaul its IT operations, cutting 300 jobs globally and outsourcing up to 820 jobs to consultancy firms.

Nokia says that the changes will help “increase operational efficiency and reduce operating costs, creating an IT organization appropriate for Nokia’s current size and scope,” and are part of the company’s strategy announcement outlined in June 2012, where it said it would cut a further 10,000 employees by the end of 2013.

The Finnish mobile maker states that today’s changes will be the “last anticipated reductions.”

Nokia will transfer “certain activities” and 820 jobs to two Indian firms — HCL Technologies and TATA Consultancy Services — while reducing its global IT operations by up to 300 employees. The Nokia job cuts will affect workers located in Finland, but outgoing staff will be offered financial compensation and a support program.

The majority of the 300 workers affected by today’s announcement will be based in Finland. Nokia has already shuttered its mobile production plants in the Finnish city of Salo, cutting around 4,000 jobs. The company has made sure to support those affected, providing grants to those who wish to start their own companies.

The company also sold its Espoo headquarters to Finnish company Exilion in a deal worth €170 million, leasing the property back from the company as it attempts to further reduce costs.

Last week, Nokia announced that its fourth quarter of 2012 was surprisingly solid, as “Smart Devices” net sales came in at approximately 1.2 billion euros ($1.57 billion), with total volumes of 6.6 million units. The company saw a rise in Lumia sales, helped by the launch of its Lumia 920 and Lumia 820 Windows Phone 8 handsets, selling 4.4 million units.

This was up from 2.9 million Lumia devices in Q3 2012, which was down from 4 million in the prior quarter.

Despite smartphone sales gains, Nokia shared a preliminary outlook for Q1 2013, where it said it expects operating margins for both ‘Devices & Services’ and ‘Location & Commerce’ to shrink. However, it expects its margin for Nokia Siemens Networks in the first quarter 2013 to rise by up to 3 percent.

Nokia will announce its full fourth quarter results on January 24.


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