Nokia, the world's largest phone maker by volume, will lay off 4,000 people and

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outsource another 3,000 to Accenture as part of a plan to slash annual spending by 1 billion euros ($1.46 billion).

Nokia said it would outsource its Symbian software activities to Accenture, who will provide mobility software services to Nokia for future smartphones.

Nokia has seen its market share in smartphones falling sharply over the past few years as it continues to lose out to Apple and other manufacturers of the upmarket handsets.

To turn around its smartphone fortunes, in February Nokia unveiled a deal to start using Microsoft software instead of its own Symbian platform.

The deal enables Nokia to cut business research and development costs by 1 billion euros, or 18 percent, by 2013 from 5.65 billion in 2010.