Microeconmics: Outsourcing

Microeconomics
Article summary: Current Event III
Nokia to cut 7000 jobs, stop developing Symbian operating system
Nokia the world’s mobile leader is cutting 7000 jobs worldwide by 2012in a move that will also leave the development of its Symbian mobile operating system for the outsourcing company Accenture. The Finnish phone maker announced the job cuts, and that the decisionshould reduce the company’s operating costs by $1.47 billion in 2013 when compared to 2010.
Of the 7000 jobs that will be slashed, 4000 will be layoffs and 3000 workers will become employees ofAccenture, a New york based company. The 3000 workers who will be moved from Nokia to Accenture, worked with Symbian before, the most used mobile operating system until Android stole the market share in thefinal quarter of 2010.
Nokia guaranteed affected employees payroll through the end of 2011. The company said it expected job reductions to occur in phases until the end of 2012. The company’splanned product and service portfolio will be largely made up of new phones that run with Windows phone software. Nokia and Microsoft have said the Windows phone deal will be worth billions of dollarsfor both firms.
Nokia also plans to consolidate the company’s research and product development sites so each has a clear mission. “At Nokia, we have new clarity around our path forward, which isfocused on our leadership across smart devices, mobile phones, and future disruptions. However, with this new focus, we also will face reductions in workforce.”, said Stephen Elop, Nokia’s presidentand chief executive. “This is a difficult reality, and we are working closely with our employees and partners to identify long-term re-employment programs for the talented people of Nokia.”, he added.Neither Nokia nor Accenture, disclosed financial terms of the Symbian deal, but did state that it will provide mobility software; business and operational services around the windows phone...