Nokia to Slash 10,000 Jobs, Focus on Lumia, Location-Based Services
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Nokia will cut 10,000 jobs, or 19 percent of its workforce, by the end of 2013, as part of efforts to improve its operating model and return the company to growth, the phone maker s executives told investors June 14.
The plan calls for the closing of a manufacturing facility in Salo, Finland--Nokia's largest in its home country--as well as facilities in Ulm, Germany, and Burnaby, Canada. The company also plans to consolidate some manufacturing operations, to reduce non-core assets and to streamline its IT, corporate and support staffs.
Additionally, three high-level executives--Mary McDowell, Niklas Savander and Jerri DeVard have stepped down and their positions filled, effective July 1, by promotions within the company.
"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 in a June 13 statement. "We do not make plans that may impact our employees lightly, and as a company we will work tirelessly to ensure that those at risk are offered the support, options and advice necessary to find new opportunities."
Unable to compete against Apple's iPhone and smartphones running Google's Android platform, the former long-time mobile phone leader posted a loss of approximately $2 billion U.S. dollars during the first quarter. It warned investors that its losses will likely be even greater in the second quarter, which ends June 30.
Elop, a former Microsoft executive, announced shortly after gaining the CEO title that Nokia was in the type of dire situation that required a perhaps previously unthinkable solution--in a well-circulated email to employees, he compared Nokia to a man on a burning platform in a frigid sea who must choose to face the flames or the freezing water. Shortly afterward, he announced that Nokia's major operating system going forward would be Microsoft's Windows Phone, instead of its long-support (but losing luster) Symbian platform.