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Nokia cuts IT workers to ease cash burn

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Nokia said it will cut around 1,000 workers from its IT workforce as part of its earlier plan to reduce headcount by 10,000 by the end of 2013, according to Reuters.

The company said that 300 IT jobs mostly in Finland will be eliminated, while it will outsource 820 employees to Indian suppliers HCL Technologies and Tata Consultancy Services (TCS) in an effort to reduce Nokia's cash burn rate.

TCS also announced that it has been appointed by Nokia to consolidate its internal applications globally, as well as transform business operations across Nokia's core application portfolio.

This move, according to a TCS statement, will see the Indian service firm consolidate global internal applications suites with a single provider. These will include ERP, CRM, PLM, SCM, enterprise information management and corporate functions.

However, according to the Wall Street Journal, this latest move by Nokia to reduce its workforce will mean the company has cut an average of 1,700 Finnish employees per year from the beginning of 2009 to the end of 2011. Nokia's Finnish headcount figures likely fell further last year when the company closed its remaining manufacturing plant in the country and cut thousands of jobs.

Nokia said the job cuts were part of a massive cost savings plan announced in June 2012 when it said 10,000 jobs would be cut in its devices and services division by the end of this year. These cuts followed earlier plans to eliminate about 14,000 jobs, according to Dow Jones Newswires.

While the headcount reduction plan seems set to continue, Nokia said sales of its latest Lumia phones were brisk, causing smartphone shipment to increase for the first time in a year, even though shipments are still well below levels one year ago, according to the WSJ.

In the fourth quarter of 2012, Nokia shipped more than 86 million total handsets, down from 113.5 million units in the same quarter 2011, reported Dow Jones Newswires.

For more:
- see this TCS statement
- see this Reuters article
- see the WSJ article (sub. req.)
- see this Dow Jones Newswires article

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