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Nokia slashes 10,000 jobs

Jennifer Scott

Nokia today confirmed it would be cutting another 10,000 people from its global workforce in an attempt to bring down costs.

The struggling phone company will also close a number of its research and development sites across Germany and Canada, as well as its Salo manufacturing plant in its home country of Finland.

"These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia's long-term competitive strength," said Nokia’s Stephen Elop, who has let go 40,000 employees since he became CEO in 2010.

"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."

A spokesman from Nokia also told Computer Weekly that the UK was unlikely to escape unscathed.

“Today’s planned changes will impact Nokia employees throughout our operations globally,” he said. “While we anticipate impacts in the UK, we have no specifics to provide at this stage.”

The cuts and closures come as the company continues to struggle with competition from other big mobile players, such as Apple and Google.

Last month, Gartner claimed Nokia had lost its crown to Samsung as the world’s top selling mobile manufacturer, dropping approximately 6% of its market share and selling more than three million less handsets than its competitor.    

As a direct result to these losses, Nokia warned its results for the second quarter would be worse than expected and a further €1 billion bill for on-going restructuring costs would need to be covered this year.

A statement from the firm referred to the “competitive industry dynamics” it was faced with and admitted the competition would still cause its results to suffer through to the third quarter of 2012.

Timo Ihamuotila, executive vice president and CFO at Nokia, believed the closures, job cuts and cost savings would put Nokia on a better footing in the future, however.

"Nokia is significantly increasing its cost reduction target for devices and services in support of the streamlined strategy announced today," he said.

"With these planned actions, we believe our devices and services business has a clear path to profitability. Nokia intends to maintain its strong financial position while proceeding aggressively with actions aimed at creating shareholder value."

All of the restructuring is set to be completed by 2013.


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