Nokia will lay off 4,000 people and outsource another 3,000 to Accenture as part of a plan to slash annual spending by 1 billion euros ($1.46 billion) as per a report.
Nokia which is the world’s largest phone maker by volume, has seen its market share in smartphones falling sharply over the past few years as it continues to lose out to Apple and other manufacturers of the upmarket handsets.
[advt]Nokia said it would outsource its Symbian software activities to Accenture, who will provide mobility software services to Nokia for future smartphones.
To turn around its smartphone fortunes, in February Nokia unveiled a deal to start using Microsoft software instead of its own Symbian platform. Nokia hopes to revive its fortunes with Microsoft partnership. The Finnish entity would be using Microsoft’s Windows Phone7 as the main software for its smart phones.
The deal enables Nokia to cut business research and development costs by 1 billion euros, or 18 percent, by 2013 from 5.65 billion in 2010.
Last week, Nokia warned that operating profit margins at its key phone unit would slip in coming quarters after reporting better than expected January-March earnings.
January-March underlying earnings per share fell to 0.13 euro from 0.14 euro a year earlier, beating analysts’ average forecast for 0.10 euro. The company noted that in the 2011 first quarter, overall industry mobile device volumes were 374 million units. Nokia’s market share fell to 29 percent from 33 percent a year earlier as nimbler Asian rivals ate into its dominant position in cheaper phones and it continued to lose out in more expensive smartphones to Apple and others.