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TCS, HCL Technologies to gain from Nokia's IT rejig

In 2009, Nokia had inked a five-year deal for desktop maintenance and support in 76 countries with HCL Technologies. That deal also involved transfer of employees from Nokia.

Nandagopal Rajan
With just a week left for its fourth-quarter results , Finnish phonemaker Nokia announced on Thursday, January 17, that it was planning to reduce its global IT organisation's headcount by up to 300 employees. The company also said it plans to transfer "certain activities and up to 820 employees to HCL Technologies and Tata Consultancy Services".

In a release, Nokia said the changes were aimed at streamlining its IT organisation and expects them to increase operational efficiency and reduce operating costs.

Most of the employees affected by these changes are based in Finland. The company said it will offer affected employees "both financial support and a comprehensive Bridge support program".

These are the last anticipated reductions related to Nokia's focused strategy announcement of June 2012. At the time, the company said it would reduce up to 10,000 positions globally by the end of 2013.

Stephen Elop, Nokia President and CEO, had said then that the effort was to "re-shape our operating model and ensure that we create a structure that can support our competitive ambition".

Asked about the impact on India, a Nokia spokesperson said: "The majority of those affected are in Finland, both for planned transfers and possible redundancies. We are now beginning consultations with employee representatives where applicable, until those have concluded it would be inappropriate to comment in further detail."

In 2009, Nokia had inked a five-year deal for desktop maintenance and support in 76 countries with HCL Technologies. That deal also involved transfer of employees from Nokia.

Nokia is trying to regain the top spot in handset rankings globally, after ceding its position to Samsung over the past couple of years. The company is banking heavily on its Lumia range of smartphones to keep it relevant in the high-end phone segment.

Releasing preliminary information about its fourth quarter 2012 financial performance, the company said the "mobile phones business unit and Lumia portfolio delivered better than expected results". It added that operating expenses were lower than expected.