Nokia Axes & Outsources Jobs, Despite Profit Boost

Finnish mobile giant Nokia will slash hundreds of jobs and outsource even more, despite estimates of a profitable Q4.

As part of Nokia’s ongoing quest to decrease its headcount and factory footprint, yesterday (Thurs) the company said it would reduce its global IT organization by up to 300 employees.

In addition, it will also transfer certain activities and up to 820 employees to two Indian suppliers – thus removing more than 1,000 members of staff from its payroll.

A Nokia spokesman said the company is now beginning the process of engaging with employee representatives on the plans, in accordance with country-specific legal requirements.

“Nokia believes these changes will increase operational efficiency and reduce operating costs, creating an IT organization appropriate for Nokia’s current size and scope. We will offer employees affected by these planned reductions both financial support and a comprehensive bridge support program,” a Nokia spokesman said.

The majority of the employees affected by the planned changes are based in Finland.

Projections for Q4 ‘exceeded expectations’

Back in June the handset maker, which was the world’s largest seller of mobile phones from 1998-2012 before Samsung took over the reins last year, said it would reduce up to 10,000 positions globally by the end of 2013.

News of yesterday’s job losses came one week after Nokia revealed its preliminary financial report for the fourth quarter of 2012, ahead of its official release next week.

The report’s estimates explained how Nokia’s devices and services sector had ‘exceeded expectations’ and achieved underlying profitability in Q4.

It went on to explain how its mobile phones business unit and Lumia portfolio delivered better than expected results and operating expenses were also lower than anticipated.

Outsourcing to India

The companies Nokia has chosen to outsource to are HCL Technologies and TATA Consultancy Services.

According to HCL Technologies’ website, it was one of India’s original IT garage start-ups, but now has more than 90,000 employees and a $6.2 billion leading global technology and IT enterprise.

Mumbai-based TATA Consultancy Services (TCS) is part of the Tata group, one of India’s largest industrial conglomerates, and has more than 254,000 of the ‘world’s best-trained IT consultants’.

A spokesman from TCS said: “TCS was selected as a global IT partner after a rigorous selection process aimed at consolidating Nokia’s global internal applications suite with a single provider. The company’s core applications for enterprise resource planning, customer relationship management, product lifecycle management, supply chain management, enterprise information management and corporate functions will be supported and developed by TCS across the world.”

[Image via gizmodo]