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Nokia announces plans to cut 10,000 jobs by end of 2013

post #1 of 36
Thread Starter 
Once a dominant force in smartphones, struggling Nokia will ax 10,000 jobs by the end of 2013 in an effort to cut costs and turn the company around.

The company announced on Thursday in a press release that it will reduce as many as 10,000 positions globally by the end of 2013. The company has already begun discussions with employee representatives in anticipation of these layoffs and in accordance with local legal requirements.

"These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia's long-term competitive strength," Nokia Chief Executive Stephen Elop said. "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."

The company also plans to shutter research and development facilities in Burnaby, Canada and Ulm, Germany, along with a manufacturing plant in Salo, Finland. Going forward, Nokia plans to prioritize key markets, and to streamline its IT, corporate and support functions.

The Finnish handset maker also provided investors with an updated outlook for its results from the current quarter. The company said that its "Smart Devices" division has been negatively affected "to a somewhat greater extent than previously expected."

Looking forward to the next quarter, Nokia said it does not expect the situation to improve. Its margins for the second quarter of 2012 are now projected to be below its previous prediction of negative 3 percent.

Lumia 900


"We are increasing our focus on the products and services that our consumers value most while continuing to invest in the innovation that has always defined Nokia," Elop said. "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. However, we must re-shape our operating model and ensure that we create a structure that can support our competitive ambitions."

Last quarter, Nokia's Symbian platform, which it is transitioning away from, dropped 60 percent of its shipments from a year prior. That placed Symbian in third place, behind Google Android and Apple's iOS.

In abandoning Symbian, Nokia has switched to Microsoft's Windows Phone platform, which powers its new flagship Lumia 900. But while Symbian's year-over-year shipments collapsed, Windows Phone shipments only grew 26.9 percent year over year, and its share over the overall market actually fell from 2.6 percent in the first quarter of 2011 to 2.2 percent a year later.

Though Nokia lost $1.7 billion selling mobile device last quarter, it earned $600 million from Apple in a patent licensing dispute resolution. That means Nokia made more from Apple's iPhone last quarter than it did from its own Lumia handset running Windows Phone 7.
post #2 of 36
Now sit back and watch the tech press label Apple as a job killer. You know it's coming.
post #3 of 36

I heard this reported this morning, with the comment that they are making these cuts in an effort to be more competitive, or something to that effect.  All I thought was, "shouldn't you just try to make products that customers want to buy?"  They are doing exactly what RIM is, which sounds good for the short-term attention deficit disorder financial analysts, but it's not addressing the underlying problem with having products a consumer wants to buy.

 

Of course they don't want to talk about that.  And what gives with their closing R&D facilities?  Isn't that again what should be driving them forward?  That makes me believe they had nothing new or good coming out of either facility.  Again, not a good sign at all for Nokia.  My guess is they'll keep cutting while sales keep sliding until they have nothing left to cut - while trying to extract maximum licensing fees for their existing tech.

post #4 of 36

I'm sure when Nokia goes under, these executives who sold the company out will be given nice positions at Microsoft for all their hard work.

post #5 of 36

I called this long ago.  Nokia has long been dead.  Never in the history of the world has a Fortune 500 company been run into the ground so fast. Elop/Microsoft did them good.  Bet the company on a failed mobile platform from a third party.  Yeah, that makes sense.

post #6 of 36

NOK reached a 52-week low and short sales are suspended...

 

It amazes me how these cell phone companies enter into a death spiral.

 

I wonder how much of Microsoft's success in the cell phone market depends on Nokia -- a lot, I bet!

 

 

Maybe the future lies in smart and semi-smart phones... later this year, Apple will have 1 or 2 older models of iPhones that appear to be in the feature phone price range....

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post #7 of 36
People can say betting on windows was a bad move (personally love my lumia) but how many alternatives did they have. Continue going on there own which had already proved to not work, or be the last android adopter which wouldn't necessarily have been any more successful than the current phones.

At least with there Microsoft deal they got a cash injection to keep them alive while they trim there business down from being a market leader complete with costs associated with a market leader, to a company that can grow.
post #8 of 36

Reshaping the company to be as attractive as possible for a buyout?

post #9 of 36

I will give them more credit for recently making a decent product (Lumia 900) than RIM.

post #10 of 36

True.  Had I been asked to bet, I would have wagered that RIM would have gone under first.  RIM's products are junk (spoken by a former BB user).

post #11 of 36

In reply to BullHead:

 

Really, you called it long ago?  So, you have something to show for it, right?  You shorted the stock, because you knew this day would come, right?

post #12 of 36
Quote:
Originally Posted by OriginalG View Post

Reshaping the company to be as attractive as possible for a buyout?

Who would buy them... or RIMM... or MMI (oh wait).

 

Seriously, I can see Apple or someone buying the NOK IP... but there doesn't seem to be any value elsewhere.

 

Unless some China corporation buys NOK ... Nah!  That makes no sense at all!

 

So, by 2013-2014 there, likely, will be 2 major players in the cell phone business:  Apple and Sammy -- I believe that the feature phones' days are numbered... though the death rattle may take several years.

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post #13 of 36

They had 122,000 employees last count prior to the layoff

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Life is too short to drink bad coffee.

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post #14 of 36
Quote:
Originally Posted by Jsyedinak View Post

I will give them more credit for recently making a decent product (Lumia 900) than RIM.

Beyond that, at least they tried to make it on their own instead of copying others' work.

Interesting that Samsung came from nowhere to the leader in just a couple of years and their phones just happen to look very much like Apple's.......
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"I'm way over my head when it comes to technical issues like this"
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post #15 of 36
Quote:
Originally Posted by kustardking View Post

In reply to BullHead:

 

Really, you called it long ago?  So, you have something to show for it, right?  You shorted the stock, because you knew this day would come, right?

 

I made this post on 2-4-2011:  http://forums.appleinsider.com/t/118530/microsoft-paying-nokia-billions-to-adopt-windows-phone-platform#post_1807287

 

Yeah, i would say i called it.  Unfortunately i do not have money to play the stock market.

post #16 of 36
Quote:
Originally Posted by jragosta View Post

Interesting that Samsung came from nowhere to the leader in just a couple of years and their phones just happen to look very much like Apple's.......

 

So, Apple decided to copy the right set of products?

 

(Sorry, someone's going to post it - might as well be someone who doesn't mean it.)  ;-)

post #17 of 36

At this point, news about NOK and RIMM evokes no emotions other than pity.

post #18 of 36
Quote:
Originally Posted by boredumb View Post

 

So, Apple decided to copy the right set of products?

 

(Sorry, someone's going to post it - might as well be someone who doesn't mean it.)  ;-)

 

Yes, I know you're joking, but...

 

Apple didn't copy anything really. A lot of people like to make a stink about the LG Prada, but obviously Apple didn't run to the drawing boards and redesign the iPhone in just a few months. Like Steve said, they had been working on the iPhone for over two years prior to its unveiling, which would date it back to 2004 sometime. No one could argue that a full screen device with multi-touch was on anyone's radar then. Just the fact that they went with multi-touch means the display size had to be relatively large to accommodate several touches at once for making different gestures.

 

It's safe to say Apple gambled big time and came out the clear winner. And while Samsung may or may not sell more "smartphones" than Apple and Android may have a larger share of the market, Apple's iOS platform is heads and shoulders above anything on the market right now. It is the largest and most vibrant mobile platform today with a thriving ecosystem that drives several multi-billion dollar markets. It's safe to say iOS will be around a long time.

Disclaimer: The things I say are merely my own personal opinion and may or may not be based on facts. At certain points in any discussion, sarcasm may ensue.
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Disclaimer: The things I say are merely my own personal opinion and may or may not be based on facts. At certain points in any discussion, sarcasm may ensue.
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post #19 of 36
Quote:
Originally Posted by AppleInsider View Post

Though Nokia lost $1.7 billion selling mobile device last quarter, it earned $600 million from Apple in a patent licensing dispute resolution. That means Nokia made more from Apple's iPhone last quarter than it did from its own Lumia handset running Windows Phone 7.

Another AI article spreading misinformation. Nokia's entire business units lost US1.7 billion, not their handset division. The majority was with their "Location & Commerce" division, and the rest with NSN
post #20 of 36
Quote:
Originally Posted by mstone View Post

They had 122,000 employees last count prior to the layoff

 

 

I know we're talking people's jobs here -- but a less than 10% cut spread over 18 months is rather a timid reduction... and well below NOK's losses in revenue, market share, profits, etc.

 

Especially when you consider that the remaining 112,000 employee's jobs's will be at risk without more drastic action.

 

It seems like this is just a "hair cut" -- when major surgery is required for survival of the patient.

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post #21 of 36

Beleaguered is the word they should use. 

post #22 of 36
Quote:
Originally Posted by jfanning View Post


Another AI article spreading misinformation. Nokia's entire business units lost US1.7 billion, not their handset division. The majority was with their "Location & Commerce" division, and the rest with NSN

 

Mmm... Isn't L&C also the source of the $600 million income from Apple?   If they are still losing money in that division, aren't they going to suffer even more competition with new global mapping solutions about to be delivered by Apple and Google?  Likely, there will be additional income from Apple -- but can they turn the division around?

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post #23 of 36
Darn I didn't hit the reply button again! Anyway, reply to Bullhead's reply: Talk is cheap - don't pat yourself on the back unless you take action.
post #24 of 36

Blackberry and Nokia won't exist in five years.

 

Probably less than three for Blackberry.

post #25 of 36
Quote:
Originally Posted by jmgregory1 View Post

I heard this reported this morning, with the comment that they are making these cuts in an effort to be more competitive, or something to that effect.  All I thought was, "shouldn't you just try to make products that customers want to buy?"  They are doing exactly what RIM is, which sounds good for the short-term attention deficit disorder financial analysts, but it's not addressing the underlying problem with having products a consumer wants to buy.

 

Of course they don't want to talk about that.  And what gives with their closing R&D facilities?  Isn't that again what should be driving them forward?  That makes me believe they had nothing new or good coming out of either facility.  Again, not a good sign at all for Nokia.  My guess is they'll keep cutting while sales keep sliding until they have nothing left to cut - while trying to extract maximum licensing fees for their existing tech.

You make a lot of sense. Also, cutting R & D is a short term cash flow solution with long term competitive consequences. It says a lot about Nokia circling the drain.

Quote:
Originally Posted by AppleInsider View Post

Once a dominant force in smartphones, struggling Nokia will ax 10,000 jobs by the end of 2013 in an effort to cut costs and turn the company around.

"These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia's long-term competitive strength," Nokia Chief Executive Stephen Elop said. "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."

Allow me to translate the last sentence above: "Everyone wishing to have a job moving forward needs to learn to speak and read Mandarin Chinese. Shit just got real."

"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge
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"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge
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post #26 of 36
Quote:
Originally Posted by Dick Applebaum View Post

 

I know we're talking people's jobs here -- but a less than 10% cut spread over 18 months is rather a timid reduction... and well below NOK's losses in revenue, market share, profits, etc.

 

Especially when you consider that the remaining 112,000 employee's jobs's will be at risk without more drastic action.

 

It seems like this is just a "hair cut" -- when major surgery is required for survival of the patient.

I think there may be a series of 10% cuts spread out over the next year or two. By cutting closer to the bone each time they may be trying to keep the patient from going into shock too soon. Either way the patient will die in the end.

"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge
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"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge
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post #27 of 36
Quote:
Originally Posted by lkrupp View Post

Now sit back and watch the tech press label Apple as a job killer. You know it's coming.

 

Let me know when the IP goes up for sale. Then we'll see Apple taking it strategically and watch Google crap itself.

post #28 of 36

MotoMo was going down until someone paid way too much money to buy them. 

"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge
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"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge
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post #29 of 36
600

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post #30 of 36
Quote:
Originally Posted by bullhead View Post

I called this long ago.  Nokia has long been dead.  Never in the history of the world has a Fortune 500 company been run into the ground so fast. Elop/Microsoft did them good.  Bet the company on a failed mobile platform from a third party.  Yeah, that makes sense.

Well, you can't give them all the credit.
Apple helped.

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post #31 of 36
Quote:
Originally Posted by Dick Applebaum View Post

Mmm... Isn't L&C also the source of the $600 million income from Apple?   If they are still losing money in that division, aren't they going to suffer even more competition with new global mapping solutions about to be delivered by Apple and Google?  Likely, there will be additional income from Apple -- but can they turn the division around?

When did Apple start paying Nokia for Location services? I think you are getting confused by the name.

Apple doesn't what Navteq does, Apple has to purchase maps off other companies. I have never used TomTom, so I don't know what their maps are like, I do know Nokia Maps are better than Googles though.
post #32 of 36
Quote:
Originally Posted by jfanning View Post

When did Apple start paying Nokia for Location services? I think you are getting confused by the name.
Apple doesn't what Navteq does, Apple has to purchase maps off other companies. I have never used TomTom, so I don't know what their maps are like, I do know Nokia Maps are better than Googles though.

I went to their global website to see what L&C does --- they do maps, among other things.
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post #33 of 36
Perhaps a mergers & acquisition candidate for Apple in a couple of years. Nokia has thousands of patents as well as a very strong digital map data and location-based content and services which could be very interesting to Apple. I doubt Apple would acquire the entirety of Nokia but purchasing Navteq might be worth consideration. Of course, by the time Nokia considers such a move Apple Maps may be robust enough to make the acquisition irrelevant.
post #34 of 36
Quote:
Originally Posted by Dick Applebaum View Post

I went to their global website to see what L&C does --- they do maps, among other things.

Mapping and mapping services according to their website, which as far as I was aware Apple isn't purchasing $600 million of mapping products from Nokia
post #35 of 36

I'm surprised that the Finns haven't marched on Elop's house with torches and pitchforks yet.

 

He's turned a small problem into a big problem. Elop has sacked tens of thousands of Finns and the company is doing worse than before.

 

Windows Phone might be a great OS but consumers and carriers don't want it. The shocking fact is that Symbian <i>still</i>outsells Windows Phone despite being uncompetitive three years ago and having seen no development since. Killing off Nokia's S40 replacement, Meltemi, also looks very short-sighted.

post #36 of 36
Quote:
Originally Posted by RichL View Post

I'm surprised that the Finns haven't marched on Elop's house with torches and pitchforks yet.

 

He's turned a small problem into a big problem. Elop has sacked tens of thousands of Finns and the company is doing worse than before.

 

Windows Phone might be a great OS but consumers and carriers don't want it. The shocking fact is that Symbian <i>still</i>outsells Windows Phone despite being uncompetitive three years ago and having seen no development since. Killing off Nokia's S40 replacement, Meltemi, also looks very short-sighted.

So they should as they actually had something half decent in the N9. I bought one to have a play with and it has some nice features. It could have been a good platform if they had kept with it.

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