Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) has announced plans to cut over 1000 IT jobs, including 820 employees to be outsourced to HCL Technologies Limited (NSE:HCLTECH) (BOM:532281) and Tata Consultancy Services Limited (NSE:TCS) (BOM:532540).
In a bid to streamline its IT operations, the Finish mobile phone maker is planning up to cut 300 jobs altogether, most of them from Finland.
"Nokia believes these changes will increase operational efficiency and reduce operating costs, creating an IT organization appropriate for Nokia's current size and scope." wrote Nokia is its press statement.
Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) announced its intention to lay off 10,000 jobs by the end of 2013, which, according to chief executive, Stephen Elop, was a "difficult consequence of the intended actions we believe we must take to ensure Nokia's long-term competitive strength."
All the employees affected by this plan will be offered "both financial support and a comprehensive Bridge support program"
Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) said, last week, that the preliminary results from the sale of Asha and Lumia smartphones were better than what the company had expected. However, it is clear that the recent improvement in Nokia's overall performance is largely driven by its extensive cost cutting plans lately.
The plan to slash 10,000 jobs in its mobile division by the end of 2012 was on top of Nokia's earlier plan to eliminate about 14,000 jobs all over the world.
In an interview with The Wall Street Journal, Nokia's former Chief Executive, Olli-Pekka Kallasvuo, who left the company in late 2010, said the rise of startup in the technology market is one of the only positive outcome of these lay offs. After being laid off by Nokia, "Many skilled former Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) employees have decided to start businesses of their own." said Kallasvuo in his interview.
The company started the trend of job slashing since the beginning of 2009 and continued to lay off an average of 1,700 Finnish employees per year, over the period of 3 years. However, the company said this latest round of job cuts is the "last anticipated reductions" plan the company has.