Nokia cuts jobs to ensure survival
Source: Agencies |
June 15, 2012, Friday
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Print Edition
Print Edition
NOKIA Corp will lay off 10,000 jobs globally and close plants by the end of 2013, the company said yesterday, in a further drive to save costs and streamline operations.
Nokia said it will shut some research and development projects, including in Ulm, Germany, and Burnaby, Canada, and close its core manufacturing plant in Finland - in Salo - where it will only maintain research and development operations.
"These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia's long-term competitive strength," Nokia CEO Stephen Elop said. "We are increasing our focus on the products and services that our consumers value most while continuing to invest in the innovation that has always defined Nokia."
Nokia also gave an updated outlook, saying that "competitive industry dynamics" in the second quarter would hit its smartphone sector to a "somewhat greater extent than previously expected" and that no improvement was expected in the third quarter.
Although the Finnish cell phone maker said it plans "to significantly reduce its operating expenses," it will continue to focus on smartphones as well as cheaper feature phones and intends to expand location-based services.
Nokia also said private equity group EQT VI had agreed to acquire Vertu, its global luxury phone brand, but that the Finnish company would keep a 10 percent minority shareholding. No financial terms were announced.
Nokia said it would also conduct an overhaul of its management team, with two long-time members of its top leadership - Mary McDowell, the head of the struggling mobile phones unit, and Niklas Savander, head of the markets sector - leaving the company at the end of June. Chief marketing officer and brand manager Jerri DeWard, who joined Nokia in January 2011, will also step down.
The loss-making company has been struggling against fierce competition from Apple Inc's iPhone and other makers using Google Inc's popular Android software, including Samsung Electronics Co and HTC. It is also being squeezed in the low-end by Asian manufacturers making cheaper phones, such as China's ZTE.
Boston-based Strategy Analytics said Nokia had significantly lost market share to Samsung, which pushed it out as the world's largest seller of cell phones by volume, grabbing a 25 percent global market share against Nokia's 22 percent.
Nokia said it will shut some research and development projects, including in Ulm, Germany, and Burnaby, Canada, and close its core manufacturing plant in Finland - in Salo - where it will only maintain research and development operations.
"These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia's long-term competitive strength," Nokia CEO Stephen Elop said. "We are increasing our focus on the products and services that our consumers value most while continuing to invest in the innovation that has always defined Nokia."
Nokia also gave an updated outlook, saying that "competitive industry dynamics" in the second quarter would hit its smartphone sector to a "somewhat greater extent than previously expected" and that no improvement was expected in the third quarter.
Although the Finnish cell phone maker said it plans "to significantly reduce its operating expenses," it will continue to focus on smartphones as well as cheaper feature phones and intends to expand location-based services.
Nokia also said private equity group EQT VI had agreed to acquire Vertu, its global luxury phone brand, but that the Finnish company would keep a 10 percent minority shareholding. No financial terms were announced.
Nokia said it would also conduct an overhaul of its management team, with two long-time members of its top leadership - Mary McDowell, the head of the struggling mobile phones unit, and Niklas Savander, head of the markets sector - leaving the company at the end of June. Chief marketing officer and brand manager Jerri DeWard, who joined Nokia in January 2011, will also step down.
The loss-making company has been struggling against fierce competition from Apple Inc's iPhone and other makers using Google Inc's popular Android software, including Samsung Electronics Co and HTC. It is also being squeezed in the low-end by Asian manufacturers making cheaper phones, such as China's ZTE.
Boston-based Strategy Analytics said Nokia had significantly lost market share to Samsung, which pushed it out as the world's largest seller of cell phones by volume, grabbing a 25 percent global market share against Nokia's 22 percent.
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