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Analysis

Nokia's scraps mobile ecosystem in fight to survive

| Text: Carl-Gustav Lindén

Nokia is shedding thousands of staff world-wide - the equivalent of one in ten workers within its mobile telephone business. The move is part of Nokia's attempt to remain in profit and improve the growth outlook within a completely new technological ecosystem.

There are currently four mobile ecosystems. Nokia is now abandoning Symbian, which currently runs its mobile telephones. That leaves Google's Android, Apple's iOS and Microsoft's Windows system. 

When Nokia now embraces Windows, developed by the American computer giant, thousands of Symbian programmers loose their jobs. In Finland some 3,000 staff face redundancy. For half of them that means unemployment while the other half will be employed by consultancy firm Accenture. 

This will be one of the largest ever changes in the Finnish labour market. Yet the situation for those who face redundancy is far from hopeless. They have after all globally sought-after skills and many international companies have already signalled they wish to employ ex-Nokia staff. US technology firm Intel has already announced plans to open new research units in Finland. 

Difficult situation

7,000 people are affected by the change. Nokia's mobile telephone business employs some 60,000 people which means these 7,000 represent more than ten percent of all employees and one in four employees in Finland.

"This means redundancies. It's a difficult situation. Together with employees and partners we try to find employment in the long term for our competent staff," says Nokia's Managing Director Stephen Elop.

The redundancies were less extensive than expected and work continues at all of Nokia's sites. The worst case scenario had 5 to 6,000 workers facing compulsory redundancy. 

Pertti Porokari, Managing Director at Finland's Federation of Professional and Managerial Staff, still hopes the solution which sees a total of 3,000 people employed by Accenture won't see them on the streets again later. In that case Nokia would just have been avoiding its responsibility.

Elop says this is definitely not the case. Accenture and Nokia have worked together to identify which people have the chance to be successful within the consultancy firm. 

New companies emerge

There is also hope that people leaving Nokia will start their own companies. The best case scenario would be hundreds of fast growing IT companies popping up across Finland.

Nokia Technopolis Innovation Mill - a cooperation between Nokia, Tekes (the Finnish Funding Agency for Technology and Innovation) and the office location company Technopolis - has so far resulted in 19 new companies and around one hundred jobs. The idea has been for Nokia to share it's unused patents, around which people can build new business ideas. 

Not only Nokia staff are affected by the cutbacks - subcontractor staff are even more exposed. Nokia and the state will provide support for those who loose their jobs through a variety of measures, but Symbian experts with subcontractors Digia, Tieto and Ixonos  will not benefit from any such measures.

Nokia's new strategy is based on close cooperation with Microsoft and has been developed under the leadership of new boss Stephen Elop. He took his position in September and now rumours say the whole operation was really just a way for the US computer giant to get Nokia on the cheap. Since Elop's Microsoft announcement in February the Nokia stock has fallen by a quarter. 

Loosing ground

Elop has promised there will be no further redundancies, but Nokia is loosing market shares and nobody can guarantee job security as long as the downturn trend continues.  Nokia's Swedish competitor Ericsson made half of its staff redundant during the difficult years of the early 2000s. Nokia has 130,000 employees world-wide and if the world's largest mobile telephone manufacturer's market continues to deteriorate, their futures remain uncertain. 

Finnish people are worried about the consequences of the job losses. This is not only about jobs at the countries industrial flagship, but also about the public sector which is dependent on Nokia's needs when it comes to the education of engineers and investments in research and development. The new government will be expected to come up with active policies to secure the sector's future. 

"What we need now is a national growth strategy, and the coming government programme must include a finance packet which will secure the new and growing software industry's future in Finland," says the leader of Finland's Federation of Special Service and Clerical Employees, Juri Aaltoen.

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