Today, Nokia announced that it will cut its global workforce by 4000 by end of 2012 and transfer 3000 Symbian jobs to Accenture. Something on these lines was expected since Nokia signed a deal with Microsoft to use Windows Mobile 7 platform for its phones.
In my blog yesterday, I had indicated that the high end mobile phone vendors were competing on the OS level and today, Nokia has announced that they will not fight the war on OS and will rather partner with Microsoft. This does not go well for Nokia.
Though, I can understand the circumstances, under which Stephen Elop had to make the decision, I do not think that this was the wisest thing to do. Reasons being the following:
1. Microsoft is already facing a tough time convincing the developer community to develop apps on the WM7 platform. Currently, both Android and iOS easily beat WM7 as a platform of choice for app developers.
2. In the top end of the mobile devices, the hardware is a commodity. What separates the players is the OS and the apps running on the device. Apple did not become the leader in this segment just because of their hardware but because of the awesome OS, accompanies by the hugely popular apps created by the developer community. By completely exiting the OS space, Nokia will end-up being an OEM for Microsoft.
3. Symbian was not just an OS. It has a huge ecosystem around it. By selling the OS to Accenture, Nokia has now alienated the entire ecosystem. It takes years to build an ecosystem like that.
4. The employees who are being terminated can choose to be on the Nokia payroll till end of this year. IF they had to let employees go, I would have thought that they would let them go as early as possible, so that you can get on with life. With these employees hanging on for the next 8 months, there will be a huge negative energy among the Nokia employees. This is not the kind of environment where you can expect a lot of creativity or innovations. However, competitors can bleed a company in 8 months.
All said, I feel sorry for Nokia as an organization. I would not be surprised if the organization as we know it today may seize to exist by 2012.