10,000 Jobs To Be Cut At Nokia As It Struggles In Smartphone Market
June 14, 2012

10,000 Jobs To Be Cut At Nokia As It Struggles In Smartphone Market

John Neumann for redOrbit.com

In a move to slash costs and streamline operations, Finland-based Nokia announced today the cutting of 10,000 jobs worldwide by the end of next year, including research and development projects in Ulm, Germany, and Burnaby, Canada. A statement from the company said they will close the bulk of its core manufacturing plant in Salo Finland, where it will only maintain research and development operations, reports Matti Huutanen for the Associated Press (AP).

“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.”

The company also announced a shuffling in its senior management, namely Mary McDowell, the head of the struggling mobile phones unit and Niklas Savander, head of the markets sector.

Nokia has appointed Juha Putkiranta, formerly senior vice president of supply chain, as executive vice president of operations. Timo Toikkanen has been appointed as executive vice president of mobile phones. He was earlier vice-president of business development, programs, and special projects.

Chris Weber will be executive vice president of sales and marketing, after serving as senior vice president of markets for the Americas. The three executives will take charge on July 1, writes John Ribeiro for IDG News Service.

At the same time, Nokia will boost investments in feature phones, and smartphones based on the Windows Phone operating system. The company also plans to acquire imaging specialists as well as all technologies and intellectual property from Scalado in Sweden.

In April, Nokia announced one of its worst quarterly results ever for a $.1 billion net loss in the first quarter as sales plunged, especially in the smartphone market. Boston-based Strategy Analytics said Nokia had significantly lost market share to Samsung, which pushed it out as the world´s largest seller of cellphones by volume, grabbing a 25 percent global market share against Nokia´s 22 percent.

The money-losing company has been struggling against fierce competition from Apple´s iPhone and popular Android models from Samsung and HTC. It is also being squeezed in the low-end by Asian manufacturers making cheaper phones, such as China´s ZTE.