Nokia Cuts 10,000 Jobs

Nokia is set to reduce its workforce by around 10,000 as part of wide ranging changes at the company.

The troubled Finnish manufacturer has increased its targets to cut the costs in its manufacturing and services. It also says it will broaden the price range of its Lumia Windows Phone devices and will differentiate the platform with hew technologies.

Nokia wants to reduce its devices and services expenses to around €3 billion a year by 2013 and will divest certain non-core assets, such as its luxury handset subsidiary Vertu, which has been sold to Swedish private equity firm EQT VI.

Not taken lightly

“To support this period of transition, Nokia intends to improve its operating model by significantly reducing its Device & Services operating expenses, substantially reducing its headcount and reducing its factory footprint,” said Nokia in a stock exchange release. “As a result, Nokia intends to return to sustainable non-IFRS operating profitability in Devices & Services as soon as possible.”

“Nokia plans to reduce up to 10,000 positions globally by the end of 2013,” it added. “Nokia is beginning the process of engaging with employee representatives in accordance with country-specific legal requirements.”

Factories in Ulm, Germany and Burnaby, Canada will be closed, while the consolidation of manufacturing operations means that Nokia’s factory in Salo, Finland will also be shut, although research and development efforts there will continue.

Nokia announced in March that 1000 jobs would be lost at Salo, while in February it said that 4,000 workers would be made redundant as smartphone operations were to be moved to Asia. The brunt of these losses was borne at Nokia’s factories in Hungary, Finland and Mexico.

Nokia had warned that the transition to Windows Phone would result in job losses and restructuring, but some shareholders have even threatened legal action, accusing them of lying to investors about the switch.

“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 Stephen Elop, CEO of Nokia. “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.”

How much do you know about smartphones? Take our quiz