Nokia to shed 7,000 staff as part of reorganisation

Nokia has been slower than rivals to take advantage of the lucrative market for smartphones

Mobile phone manufacturer Nokia has announced it will shed 7,000 jobs from next year as part of a plan to refocus the company on smartphones.

The firm said 4,000 jobs worldwide would be cut - including a total of 700 jobs from Nokia's UK sites.

Nokia will also transfer a further 3,000 employees to outsourcing and consultancy group Accenture, which will take over Nokia's Symbian software.

The Finnish firm is moving from Symbian to Microsoft's smartphone technology.

The firm recently confirmed the deal with Microsoft last week to jointly develop smartphone technology, which will cut costs by about 1bn euros a year.

Under the terms of that deal, Nokia agreed to start using the Microsoft's operating system on its smartphones instead of its own Symbian platform.

"This is about keeping focus within Nokia on Windows Phone. It helps to get rid of any doubts on where this company is going," said Carolina Milanesi, an analyst at Gartner.

Nokia's response to the smartphone threat from competitors such as Apple's iPhone and phones using Google's Android system has been long been a key investor concern.

'Dark day'

In Finland, where Nokia is expected to cut 1,400 jobs, unions said the losses were not as bad as had been feared.

"This went slightly better than expected, because Nokia transfers Symbian development," said Pertti Porokari, chairman of the Union of Professional Engineers in Finland.

"These 1,400 people to be laid off are mainly MeeGo coders and they should have quite good chances to find new jobs," he added.

However, unions in the UK were not so happy.

"This is another dark day for the British economy," said Tony Burke, Unite assistant general secretary.

"What is very disheartening is that mobile phones and their associated technology are one of the growth areas in the British economy, yet this still does not stop a successful company such as Nokia throwing people out of work".

Nokia hopes that the job cuts and restructuring will also help produce savings of 1bn euros for the firm by 2013.

"With this new focus, we also will face reductions in our workforce," said Stephen Elop, Nokia president.

"This is a difficult reality, and we are working closely with our employees and partners to identify long-term re-employment programmes for the talented people of Nokia."

Mr Elop later told reporters at a press conference near Helsinki that he believed this would be the full extent of the job losses.

He added that the restructuring announcement was the "full plan for as far as we can see into the future".