Nokia annouced that it will layoff more than 7,000 employees and outsource its Symbian software development division. The cuts will be worldwide and represent about 12 percent of its total workforce.

Nokia investors welcomed the news and sent Nokia shares up 4.3 percent as the move is expected to save the company 1 billion euros or US$1.46 billion.

Nokia is struggling to compete in the smart phone market with Apple’s iPhone and RIMM’s BlackBerry. The company once dismissed the iPhone as a lifestyle phone and today it is struggling for its very survival as a result of the iPhone.

The iPhone has made tremendous inroads in the smart phone market and to remain competitive Nokia has chosen Microsoft’s Windows Phone 7 software to power its future smart phones instead of its own Symbian platform.