Is Nokia's offshoring a sign of the pressure it is under and a way of hiding redundancies?

Nokia was once the dominant force in the mobile phone sector. Then came the smartphone giants. The likes of Apple and Samsung have ripped into Nokia’s market share and quickly put the Finnish firm under pressure.

Given the loss of its dominance the company looks like it is on a mission to cut costs. Just recently it has signed a couple of IT outsourcing contracts with offshore suppliers.

This month Nokia appointed Indian IT giant Tata Consultancy Services (TCS) to support and develop its global business applications as it consolidates the support of systems under a single supplier. It has also signed an IT outsourcing agreement with HCL Technologies.

The agreements saw hundreds of jobs cut and transferred to the suppliers, who both have operations in Finland.

Not only is it interesting from a Nokia perspective but is also very revealing in that countries in the Nordics are increasing their use if offshore based suppliers. Nokia looks set to work with TCS and HCL in the long term.

This article by a Finland based Wall Street journal writer asks if Nokia outsourcing its redundancies?

The recession has really changed things on the continent. A few years ago many IT professional viewed continental Europe as a safe haven, where they were unlikely to lose their jobs to lower cost staff provided by a supplier. Not anymore it seems.

Read this article about a UK IT professional who moved abroad so he could compete for work.

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Is Nokia's outsourcing to TCS "hiding redundancies"?


The better question to ask would be: When did outsourcing staff to the likes of TCS - even under TUPE agreements - ever NOT lead to redundancies?

Companies like TCS have made a fortune through hoovering up contracts for work and throwing the people who used to do that work on the scrapheap. Why should they stop now?