Nokia Cuts Jobs as it Struggles to Stay AfloatBy: Shawn Hess - June 14, 2012
Nokia is struggling to stay afloat ever since Apple introduced the iPhone.In fact, Samsung and Apple have gained huge handset market shares and Nokia is on a roll with four straight quarterly loses in a row.
Today they announced a reduced earnings forecast for the remainder of 2012, and they really don’t expect to turn a profit in 2013 either.
Nokia CEO, Stephen Elop has been struggling with plans to reorganize operations and regain some of the company’s market value. He also introduced plans to cut over 10,000 jobs in research and manufacturing. Along with the job cuts, sites in Finland, Germany and Canada will be closed. Also top executives Niklas Savander, Mary McDowell and Jerri DeVard will part ways with the company.
Nokia’s Chief Executive Stephen Elop commented on the cutbacks in a statement:
“These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia’s long-term competitive strength,”
“We have very challenging business conditions and its very important that we move forward aggressively and urgently,”
“We need to ensure that we have the capital requirements in place to help us through our transition.”
“We must re-shape our operating model and ensure that we create a structure that can support our competitive ambitions,”
Take a look at Bloomberg’s coverage of the events at Nokia:
Currently, Nokia has a market value of $9.3 billion which has declined over 48% in the last twelve months. The current job cuts come in addition to 14,000 cuts they announced last year. All of the reductions should be complete by the end of 2013.
Naturally, the instability of the company leaves them open to a takeover by competitors. Hopefully they can regain a foothold in the market after the restructuring.