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Rediff.com  » Business » Nokia cuts 300 jobs; outsources IT function to TCS, HCL Tech

Nokia cuts 300 jobs; outsources IT function to TCS, HCL Tech

January 17, 2013 17:17 IST

Nokia said it will outsource the IT function to Indian technology firms TCS and HCL Technologies, a move that will see the Finnish handset maker cutting up to 300 jobs.

Nokia plans to transfer certain activities and up to 820 employees to HCLT and Tata Consultancy Services as part of the process, it said in a statement.

The financial details were, however, not disclosed.

"Nokia outlined a range of planned changes today (on Thursday) to streamline its IT organisation. Nokia believes these changes will increase operational efficiency and reduce operating costs, creating an IT organisation appropriate for Nokia's current size and scope," the statement said.

Nokia, which has a strong presence in India including a manufacturing facility in Tamil Nadu, said it plans to reduce its "global IT organisation by up to 300 employees... These are the last anticipated reductions as part of Nokia's focused strategy announcement of June 2012".

The company had announced slashing of up to 10,000 jobs globally by the end of 2013 as part of the restructuring process.

The majority of the employees affected by the announcement today are based in Finland.

"Nokia will offer employees affected by these planned reductions both financial support and a comprehensive Bridge support program," the company said.

Nokia is beginning the process of engaging with employee representatives on these plans in accordance with country-specific legal requirements, it added.

The handset maker has been witnessing tough competition from rivals Samsung and Apple in the smartphone category. It lost its leadership position to Samsung but has been aggressively launching new products based on Microsoft's Windows platform along with other operating systems like Belle.

As part of the restructuring process, Nokia announced the closure of its facilities in Ulm (Germany) and Burnaby (Canada) last year. It also sold its luxury brand Vertu to a private equity firm, EQT.

Besides, it sold its head office building in Espoo to real estate investment firm Exilion for 170 million euros (over Rs 1,218 crore).

The company ended the third quarter with gross cash of 8.8 billion euros, and a net cash position of 3.6 billion euros. Nokia Group's net sales in Q3 2012 stood at 7.2 billion euros, down from 7.5 billion euros in Q2 2012.

Meanwhile, in a separate statement, HCLT said its new agreement with Nokia includes functions like data centre, network management, end-user computing services and cross- functional service management.

HCLT has been delivering global service desk and desktop management outsourcing services for Nokia since 2009.

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