Mobile handset maker Nokia is laying off 300 employees from its India unit and transferring 700 of them at its Bangalore facility to IT management and consulting company Accenture, reports The Economic Times, citing a Nokia executive. This follows the company’s announcement to transfer 3000 employees, working on its Symbian mobile operating system to Accenture. Reports indicate that Nokia will lay off 4000 employees, along side the transfer to cut annual R&D costs of its Phone unit by 1 billion Euros, reducing 12% of its workforce. The affected employees work in Nokia facilities across China, Denmark, Finland, India, US and UK.
Nokia says that the collaboration with Accenture will extend beyond Symbian software development and support, and Accenture will also provide mobility software, business and operational services around the Windows Phone platform to Nokia and other ecosystem participants.
However, this looks like a route that the company is taking to gradually exit from Symbian, its organically developed smartphone OS platform, and transit to Microsoft’s Windows Phone. Recently, Nokia and Microsoft signed a formal agreement to build a new global mobile eco-system, integrating applications and services from the two platforms. According to the agreement, Microsoft receives a running royalty from Nokia for the Windows Phone platform, starting when the first Nokia products incorporating Windows Phone ship, while Nokia receives payments measured in the billions of dollars, from Microsoft. The move was a measure to counter increasing competition from the likes of Apple’s iOS and Google’s Android, in the Smartphone segment, which resulted in Nokia losing marketshare.
According to a directors report filed with India’s Registrar of Companies, Nokia India Private Limited reported a total income of Rs. 265256.41 crore for the financial year ended March 31st 2010 (FY10), up marginally 0.20% from Rs. 26203.99 crore reported during the corresponding period the year before (FY09). It reported a net profit before Interest and Depreciation of Rs. 1686.18 crore, down from Rs. 1710.99 crore the previous year. The net profit after tax of Rs. 1329.79 crore for FY10, up from Rs. 1097.68 crore reported in FY09. The report says that exports from their Chennai factory had increased, but the net profit before taxes had decred by 0.25% of turnover due to ‘constraining market forces’. A Nokia India spokesperson, when contacted earlier this month, had declined to comment on its financials “per company policy”.