updated 06:20 am EDT, Thu June 14, 2012
Nokia struggles to address plunging sales
Nokia has announced that it has ‘sharpened’ its strategy moving forward, axing a further 10,000 jobs. The latest cuts now bring the number of employees who have lost their job since CEO Stephen Elop took the helm in 2010 to a staggering 40,000. The latest planned restructure is said to be the biggest yet, and was accompanied by a further 9 percent plunge in the value of Nokia shares.
‘We intend to pursue an even more focused effort on Lumia, continued innovation around our feature phones, while placing increased emphasis on our location-based services,’ said Stephen Elop, Nokia president and CEO. ‘These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia's long-term competitive strength,’ added Elop. ‘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.’
Nokia hasn’t limited the cuts to rank and file staff –three senior executives have also been axed. Chief marketing officer Jerri Devard, executive VP of mobile phones Mary McDowell and executive VP of markets Niklas Savander have all been shown the door. They are paying the penalty following Nokia’s $775m loss in Q1, which has been followed by further losses in Q2 (which are yet to be fully detailed). Internal candidates have replaced them, while they will continue to act in an advisory capacity to help their replacements through a transition phase.
As had been rumored, Nokia has pursued a deal with EQT to offload its high-end business brand Vertu. Nokia did not reveal how much it had sold the boutique line, although earlier rumors had suggested a figure in the order of $250 million or higher had been on the table. Any cash injection is welcome for Nokia, which is in danger of burning through its cash reserves by the end of 2013. The cost of the current restructure has been estimated at over $1 billion.