Nokia Contemplates Deep Job Cuts Due to Windows Phone 7

Nokia logoWhile Nokia's growth has stalled, competitors like Apple and Android phone makers (Motorola, ZTE, HTC, etc.) have soared. Now the company is forced to make a big transition as it prepares to move away from the Symbian operating system to Microsoft's Windows Phone 7.

Finnish labor unions, according to Reuters, fear that the move could cost thousands of jobs. Many engineers at Nokia had worked on developing and maintaining Symbian and its apps. Now they are likely to be sent packing.

A company spokesperson says talks with staff about the impending cuts will occur "toward the end of April". Analysts believe the delay could mean the deal with Microsoft hasn't been signed and finalized.

It could also be due to the fact that Finland's national elections fall on April 17. The "True Finn" populist party has recently surged in the polls, reaching second place. Major job cuts could propel them further and create a headache for the European Union's currency efforts. Markku Jokisipila, a political scientist from the University of Turku suggests, "It would have probably boosted True Finns as they have criticized big corporations and they could use it in their campaign."

Nokia Chairman Jorma Ollila, in an interview with Finnish newspaper Helsingin Sanomat, reassuringly offers, "This is a global restructuring of our product development, so it is not only about Finland. There is nothing on the horizon that would be particularly horrible for Finland, or something that would give grounds for the argument that Finland would not be treated well."

Unfortunately, what's good for Finland and the EU may backfire for both Nokia and its partner Microsoft. Shareholders are happy with the deal, but upset that Nokia does not immediately begin scrapping Symbian.

States Mr. Ollila, "We have spoken with 20-30 central shareholders and their message is very clear. They consider the strategy good and the Windows decision the right one. They do not like that we are about to start a restructuring period that takes 18 months or two years. It is such a long period that some investors do not have patience for that."

Nokia remains a sales giant in Europe and throughout much of the rest of the world, despite its weak presence in the U.S. Nokia's switch to Windows Phone 7 may hand Microsoft the second place spot in global smart phone operating system market share. Microsoft reportedly paid Nokia $1B USD to avoid turning to Android. It also helped that Nokia's new chief executive, Stephen Elop, was a former executive at Microsoft Canada.

Source: DailyTech

Tags: Nokia

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