Nokia's Microsoft deal could result in loss of 6,000 R&D jobs

Nokia's Microsoft deal could result in loss of 6,000 R&D jobs
A fundamental part of Nokia's decision to back Windows Phone 7 was motivated by a desire to be more efficient in terms of operating expenses.

Over the course of the last two decades, its R&D investment has swelled to over €4 billion annually as the company looked to manage both sides of its business – the development of fresh hardware, and the continued progression of the Symbian platform.

However, the rise of competitors such as Apple's iOS and Google's Android platform from relatively small levels of investments makes you wonder what all those workers have been doing.

It stands to reason that Nokia's commitment to R&D is to be scaled back as Microsoft's OS becomes its focus. Finnish unions believe this could result in the loss of up to 6,000 jobs in the coming years.

Tightening its belt

Nokia CEO Stephen Elop has previously commented only to confirm that there will be "substantial reductions in employment" following the firm's strategic partnership with Microsoft.

It's a stance that Pro – Finland's largest private sector office workers union – claims will translate to a 38 percent reduction in Nokia's R&D workforce.

That's a headline grabbing figure, though when you consider Nokia's R&D budget for 2010 came in at $4.3 billion – more than twice that of Apple – serious changes were always on the cards.

Shifting priorities

Nokia's support for WP7 will allow the firm to draw back from such costly commitments in the coming years – a factor Elop has claimed is crucial to the Nokia's continued role as a major player in the smartphone market.

It's likely any cull will be staggered, however, rather than implemented in one fell swoop.

"The reductions are likely to come gradually, over the next 12 months because they have some further development in the pipeline for Symbian," FIM Bank analyst Michael Schroeder told Bloomberg.

"The expectation is that after the transition period they would have cut a third of their device R&D spending compared to what it was in 2010, so that would mean €1 billion in total."

[source: Bloomberg]

With a fine eye for detail, Keith Andrew is fuelled by strong coffee, Kylie Minogue and the shapely curve of a san serif font.


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