& cplSiteName &

Nokia Cuts 10,000 Jobs, Restructures

Ray Le Maistre
6/14/2012
50%
50%

Nokia Corp. (NYSE: NOK) has unveiled a major restructuring process in an effort to become a profitable and more relevant company.

The Finnish mobile company, which recently lost its long-held position as the world's leading device maker to Samsung Corp. , has been struggling in the face of competition from the Android-based smartphone vendors, Apple Inc. (Nasdaq: AAPL) and a new wave of low-cost feature-phone players, reported a massive loss for the first three months of this year and is the subject of much speculation about its future. (See Euronews: Takeover Rumors Lift Nokia, Nokia Loses Its Mobile Crown and Nokia Loses More Than €1.57B.)

With the second quarter's performance looking dire, CEO Stephen Elop has decided to take drastic measures in order to survive the onslaught, though his tactics and the outlook for the next few quarters have sent investors running to the hills -- Nokia's share price is down 11 percent to €1.98 Thursday morning on the Helsinki stock exchange.

Here are the key details announced early Thursday.

  • Nokia is to cut up to 10,000 jobs worldwide by the end of 2013. As part of this it will shrink its IT, corporate and support functions. In February the company announced the loss of 4,000 jobs. (See Nokia Cuts 4,000 More Jobs .)

  • Certain R&D projects will be reduced, resulting in the closure of research facilities in Ulm, Germany, and Burnaby, Canada.

  • Manufacturing operations will be further consolidated, resulting in the closure of facilities in Salo, Finland. R&D operations will continue in Salo.

  • None-core assets will be shrunk, closed or sold. As part of this process, Nokia has agreed to sell a majority stake in its luxury mobile phone unit, Vertu , to private equity firm EQT VI for an undisclosed sum. Nokia will retain a 10 percent stake in Vertu, which is based in the U.K. and employs about 1,000 staff.

  • The cost-cutting measures, which will result in €1 billion (US$1.26 billion) of restructuring charges, should help the company reduce its annual operating expenses (excluding one-time charges such as restructuring costs) at its Devices & Services (smartphones and feature phones) line of business by €1.6 billion ($2 billion), leaving its annual operating expenses run rate at €3 billion ($3.77 billion) by the end of 2013.

  • The company has promoted internally to create a new senior team (from July 1): Juha Putkiranta will be executive vice president of Operations; Timo Toikkanen will replace outgoing Mary McDowell as executive vice president of Mobile Phones; Chris Weber will be executive vice president of Sales and Marketing; Tuula Rytila becomes senior vice president of Marketing and chief marketing officer, replacing current CMO Jerri DeVard, who is leaving the company; and Susan Sheehan will be senior vice president of Communications. In addition, executive vice president of Markets, Niklas Savander, is leaving the company. In April, Nokia announced that global sales leader Colin Giles was leaving on June 30. (See Nokia Streamlines Sales Management.)

  • Nokia's smartphone sales are shaping up to be worse than expected during the second quarter, which closes June 30, while "competitive industry dynamics" are set to make the third quarter a tough one too. The company now expects its Devices & Services second-quarter operating margin (before one-time costs) to be worse than the first quarter's negative 3 percent, compared with its previous expectation of recording an operating loss about the same as the first quarter's.

  • The company, which has three business units (Devices & Services, Location & Commerce, and Nokia Siemens Networks) believes the changes can reverse its fortunes and make it a growing, profitable company again. It intends to invest in its location-based services that can be integrated into its phones and focus its device developments on the Lumia range. As part of this strategy it has agreed to acquire Swedish imaging technology specialist Scalado for an undisclosed price, a move that will give it technology, intellectual property and development staff.

    CCS Insight analyst Ben Wood noted on Twitter that the resizing of the company is a "necessary evil" but that Nokia "can't keep cutting forever." He added that the purchase of Scalado is "astute… [a] great asset underlining Nokia is going big in imaging."

    Nokia has been having a tough time of late.



    — Ray Le Maistre, International Managing Editor, Light Reading

    (4)  | 
    Comment  | 
    Print  | 
  • Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
    digits
    50%
    50%
    digits,
    User Rank: Light Beer
    12/5/2012 | 5:30:15 PM
    re: Nokia Cuts 10,000 Jobs, Restructures


    It sees its location-based apps as a differentiator but will consumers view it that way?


    If Lumia doesn't capture more people's imaginations in the next 6 months then whether it has in-house service capabilities to integrate might become irrelevant.

    krishanguru143
    50%
    50%
    krishanguru143,
    User Rank: Light Beer
    12/5/2012 | 5:30:14 PM
    re: Nokia Cuts 10,000 Jobs, Restructures




    There are two main cartography companies, Nokia owns one and TomTom the other.  So even though Apple released their new navigation app, it relies on the cartography from TomTom.

     

    Nokia needed to cut 10,001 jobs, not 10,000.  The "extra" one is none other than Elop himself. He put the company in the position it currently is in.  Sooner or later, the shareholders and the board need to accept the fact that Elop is not the person for the job.  WP7 is about as irrelevant as you can get in the mobile sector, so it is impossible to become relevant with an irrelevant product.

    Cutting 10,000 jobs is a drastic measure, but he said the same thing about transitioning to WP7.  How has that worked out?  One drastic measure now requires another.  NOK also is ever nearing the point of being delisted, all they need to lose is another ~$1.40 and then continue to close under $1.00 and a delisting will be a certainty unless Nokia can prove a turnaround is in the works.  Unless that turnaround involves dumping WP, I can’t see them staying listed as their current plans have failed miserably.




    Rush21120
    50%
    50%
    Rush21120,
    User Rank: Light Sabre
    12/5/2012 | 5:30:14 PM
    re: Nokia Cuts 10,000 Jobs, Restructures


    For Nokia the train has already left the building for location-based services as that fight is now Google and Apple.  Catching either of them without clear distinction (and I don't know what that is for Nokia) will be next to impossible so best case they get overflow.  Nokia missed the train/boat many years ago. 


    As for promoting within thats great but unless these folks are visionaries and ones without the Noika view it won't help Nokia. 

    From The Founder
    Either we perform a complete 'factory reset' on the way the telecom industry creates and deploys virtualization, or we face the consequences.
    Flash Poll
    Live Streaming Video
    Charting the CSP's Future
    Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
    LRTV Custom TV
    The Urgency of Commercial 5G Services

    4|26|17   |     |   (0) comments


    The progress of 5G has been closely monitored in the industry. At the 2017 Brooklyn 5G Summit, the sense of urgency for a commercial 5G launch had started to surface among operators.
    Women in Comms Introduction Videos
    How Diversity Helps Comcast Mirror Its Customer Base

    4|26|17   |   2:55   |   (0) comments


    Diversity brings innovation, creative ideas and a way to reflect the broad spectrum of your customer base, Comcast Director of Customer Experience Jenelle Champlin says.
    LRTV Huawei Video Resource Center
    Mobile Operators & Video

    4|25|17   |     |   (0) comments


    Ovum's Ed Barton discusses the latest mobile operator strategies for mobile video.
    LRTV Custom TV
    Infinera Introduces Instant Network

    4|20|17   |     |   (1) comment


    Mike Capuano, vice president of marketing at Infinera, discusses the advancement from Instant Bandwidth to new Instant Network capabilities, which include Bandwidth License Pools, Moveable Licenses and Automated Capacity Engineering (ACE).
    Women in Comms Introduction Videos
    Vodafone's Eubank on Sponsors, Mentors & Moving On Up

    4|19|17   |   4:25   |   (0) comments


    Vodafone America's Head of Operations Kimberly Eubank breaks down the difference between a sponsor and a mentor and shares why both made a big difference in her career.
    LRTV Custom TV
    NYC Auto Show: Are We Smart Yet?

    4|18|17   |     |   (0) comments


    The auto industry is facing some big transformations as electric vehicles, autonomous technology and connected cars are seen as the future of the industry. During the much-anticipated NY international auto show, there was an emergence of new technology and mobility service on the show floor. Aside from performance, brands like Lincoln, Hyundai, Honda, Mercedes and ...
    LRTV Huawei Video Resource Center
    The Impact of Video

    4|18|17   |     |   (0) comments


    David Mercer from Strategy Analytics discusses the impact of video on current strategies.
    LRTV Custom TV
    Pardeep Kohli Discusses Network Transformation & the Market Opportunity for the 'New' Mavenir Systems

    4|13|17   |     |   (0) comments


    In a brief discussion at MWC 2017, Heavy Reading analyst Adi Kishore talks to Pardeep Kohli, CEO, Mavenir Systems about the creation of the 'new Mavenir' and some of the key challenges facing operators in today's market. A key theme of the discussion centers around operator need for software-only, virtualized solutions and how they will need to adapt to ...
    Women in Comms Introduction Videos
    Tech Maverick Shares Her Tips for Gender Inclusivity

    4|12|17   |   7:28   |   (0) comments


    Wendy Hall Bohling, a corporate escapee, author and gender exclusivity consultant, tells her story of sexism, bias and progress along the road to gender equality in the workforce.
    LRTV Huawei Video Resource Center
    Huawei at MWC 2017

    4|11|17   |     |   (0) comments


    At Mobile World Congress 2017, the biggest mobile industry gathering of the year, Huawei showcased its new innovations and solutions with the theme "Open Road," which focuses on cloud, 5G, operation transformation, videos and consumer-oriented products. Its campaign has been recognized by three awards given by GSMA.
    LRTV Custom TV
    China Telecom NFV Infrastructure on RSD

    4|6|17   |     |   (0) comments


    Lynn Comp, senior director of market development of Intel, is joined by Chong Zhang, storage engineer at Inspur and Ou Li Yan, architect for technology strategies of China Telecom, for a discussion of what NFV brings.
    LRTV Custom TV
    Nokia's IMPACT Software Demo

    4|6|17   |     |   (0) comments


    Khamis Abulgubein of IoT market development at Nokia demonstrates IMPACT (intelligent management platform for all connected things), a software solution with a horizontal approach to managing any device on any application.
    Upcoming Live Events
    May 15-17, 2017, Austin Convention Center, Austin, TX
    May 15, 2017, Brazos Hall - Austin, TX
    May 15, 2017, Austin Convention Center - Austin, TX
    June 6, 2017, The Joule Hotel, Dallas, TX
    All Upcoming Live Events
    Infographics
    With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
    Hot Topics
    Surprise! AT&T Markets 4G Advances as '5G Evolution'
    Dan Jones, Mobile Editor, 4/25/2017
    Did Verizon Outbid AT&T for Straight Path?
    Dan Jones, Mobile Editor, 4/25/2017
    First Year TIPs the Scale Toward Success
    Denise Culver, 4/24/2017
    Verizon: Small Biz in Cybercrooks' Crosshairs
    Carol Wilson, Editor-at-large, 4/27/2017
    Like Us on Facebook
    Twitter Feed
    BETWEEN THE CEOs - Executive Interviews
    One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
    TEOCO Founder and CEO Atul Jain talks to Light Reading Founder and CEO Steve Saunders about the challenges around cost control and service monetization in the mobile and IoT sectors.
    Live Digital Audio

    Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.