Nokia said today it plans to lay off workers and transfer its Symbian business to a management consulting firm as part an effort to cut its operating expenses by $1.5 billion over the next two years.
About 4,000 of Nokia's employees, mainly in Denmark, Finland and the United Kingdom, will lose their jobs by the end of 2012.
The company's Symbian business and 3,000 associated employees in China, Finland, India, the United Kingdom and the United States will be transferred to Ireland-based Accenture, one of the largest consulting firms in the world.
Stephen Elop, Nokia president and CEO, said the company faced a "difficult reality" as it worked to reverse the company's downward slide in the global handset market.
"At Nokia, we have new clarity around our path forward, which is focused on our leadership across smart devices, mobile phones and future disruptions," Elop said in a statement. "However, with this new focus, we also will face reductions in our workforce."
Financial terms of Nokia's deal with Accenture were not announced. Under the agreement, which is expected to be finalized this summer, Accenture becomes a preferred partner for Nokia's smartphone development around Windows Phone 7. Accenture bought Nokia's Symbian support service business in 2009, creating the foundation of the company's mobility services portfolio. The companies' relationship dates back to 1994.
Elop said last week layoffs were in store as the company worked to cut expenses and bring its device portfolio up to speed with competing smartphones through a partnership with Microsoft on Windows Phone 7 devices.
As Elop stated last week, all employees affected by the layoffs will be able to stay on Nokia's payroll through the end of this year. The job cuts will occur in phases through the end of 2012 as Nokia ramps up the development of smartphones running Windows Phone 7.
Discussions with employee representatives began today, as required by law. Nokia is trying to mitigate the impact of the job cuts through a program that offers job training and other support to laid-off employees. At the end of last year, Nokia employed about 132,000 people around the world.