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37

Nokia plans to reduce up to 10,000 positions globally by the end of 2013

WP Central

Although the Scalado news is inspiring, Nokia is still in the rough as it plans to layoff nearly 10,000 workers by the end of 2013 in a continued restructuring of the company.

In addition, the Finnish firm is planning to close its facilities in Ulm, Germany, Burnaby, Canada and its manufacturing facility in Salo, Finland (Research and Development efforts in Salo will remain) while focusing on their Lumia line of phones including "broadening the price range of Lumia and continuing to differentiate with the Windows Phone platform". Part of the cost savings move has also been the successful divestment of the Vertu luxury line of Nokia phones to EQT VI for a rumored 200 million euros ($260 million).

Finally there are leadership changes as well including the promotion of former Microsoft executive Chris Weber from President of Nokia Inc. (US), and head of Markets, North America to executive vice president of Sales and Marketing, where he will join the leadership team of Nokia. The other changes in Nokia's leadership team can be found here.

So what does all of this amount to? There is a lot going on at Nokia including a dramatic reshaping of the company under CEO Stephen Elop driven mostly by market demands and the recent realignment of the company around Windows Phone. Analysts and equity firms have been downgrading Nokia stock for weeks now and this is their response which equates to massive cutbacks both in terms of people and facilities, potentially saving the company a lot of money during these tight times.

Nokia has previously lost 24% of its market share losing out to Samsung for top manufacturer. With the continued stampede of iPhone and Android, Nokia will be relying on Windows Phone 8 and its increasingly popular Lumia line to save it from financial despair. 

Nokia stock is currently trading at $2.79 a share which is near it's 52 week low of $2.61. It will be curious to see how the market responds to these proposed cutbacks and restructuring.

Source: Nokia

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Reader comments

Nokia plans to reduce up to 10,000 positions globally by the end of 2013

37 Comments

I should purchase some stock while its cheap, because Nokia is making all the right moves and their stock will eventually rise again ;)

I bought Facebook stocks when they sank for $25 so yes lower the better has who knows when it will go twice high

The news is even worse than this summary - they also said their performance in the 2nd and now 3rd quarters will be worse than expected. Stock is down over 16% to $2.33 at 9:30AM PDT - I wouldn't rush to buy.

Seems they are finally closing the manufacturing plants in lazy and expensive western countries to open faster and cheaper plants in Asia. Which they probably should have done years ago.

Shows you why Asia are smarter in business than US. Look at US economy is garbage and look at joke president we elected who is all talk never done anything. I hope we do not reelect this joker

Well, it looks like they are becoming Microsoft light. Basically all former Microsoft execs are running the key parts of the company. We all knew the manufacturing was headed to Asia. They can't get their supply chain costs competitive without doing so unfortunately. Now the real question is will they start cutting volume component deals with Samsung, LG, and Qaulcom like apple and samsung. With the success of the Lumia line in the US, I suppose they're back in a better position to start negotiating volume deals. The upcoming Windows 8 tablets should help drive component costs down also. They'll sell a lot more tablets than phones if their designs are met with the same excitement.

Lets hope some are announced during Microsofts win8 conference thingy next week is it? I'll be the 1st to pre order one ;) you can count on that!

Actually their bargaining position for component deals is not good, at all.
Their corporate bonds are rated junk, which puts them in the category of payback-risk status.
Their suppliers will now offer them more stringent, deals, with shorter pay windows, and they won't get first dibs of crucial components.   All those go to Apple and Samsung.

Yes good mood just layoff the people because Microsoft is owner and replace nokia workers who knows more. Have Microsoft works instead. Yes restructure good way

Where are the sales numbers? Give me those so I can decide whether to stick or drop Nok. If I had to guess, sales are bad. 2Q is not over and you're already announcing a loss. Hmm. Someone teach Nokia and Microsoft how to make commercials. :-)

Here is reason why nokia stocks are down and why they need restructure.

LONDON, June 14 - A slump in the share prices of telecoms group Nokia and heavyweight bank Credit Suisse dragged down European shares on Thursday, with many investors still avoiding equities due to fears over the euro zone debt crisis.

EDT and others.
 
This stock is heavily traded, short sellers and major derivative trades is making this stock very volatile today and will over the next few days.
 
Remember these two things:
 
MS looked at Nokia's books and decided against buying it ( rumor two days ago)
Warnings in Q2 and Q3
 
Theae two reasons are good enough to not invest now as the stock will jump all over the map for the next month at least. Unless you just want to gamble or a savy day trader I would not recommend this trade.
 
I still believe in Nokia for sure. But now is not the time to invest.
 
-ok

FWIW - you have to wonder about the negative press Nokia AND RIM are getting. Each time you hear about Nokia being knocked in the press, they ALWAYS mention Nokia's Q1 performance - which DOES NOT have the Q2 numbers - which has the US Lumia launch.

For me, Nokia is THE most capable and hungry mobile company out there. Apple is merely resting on it's laurels and I daresay - apart from a different form factor and 4G/LTE the new iPhone 5 is going to be another incremental upgrade in a prettier package... but with an OLD iOS UI.
When you take the beauty of the Window 8 UI with 5 or 6 phones out there to run it... the iPhone's nice design, but tired UI... the UI might be the thing to finally bring Apple's mobile phone dominance to a grinding halt.
2-cents.

 

 

 

 

1) The same was said for q4/11 numbers. Just wait for q1 when the Lumia will be really into the numbers and not just for less than a week. Then q1 came and the lumia sales were a desasrers with only 2 million sold in total while Samsung and apple moved over 35 million each. So now we are waiting for q2 numbers and from all what you can here they will be a disaster too. Keep in mind that Nokia comes from an around 0.5% market share. So even if they sell by a factor 10(!) more phones they still will only get a very moderate 5% share.
2) The mainstream media in Europe and Finland is burying Nokia already. Nokia isn't able to stop the bad press which is crucial for a success. And regarding the tiles: If I read comments in non tech magazine website I have the impression that about 80-90% of the posters don't like the tile concept at all. Same within Windows 8 articles. Outside of MS land the people just don't like Tiles and Metro.

Now for nokia working about 50000 eployees. its very big number. 10000 is correct number of workers is enouf for nokia.

But the Lumia 900 is only $99 at ATT-how much cheaper does it have to be? Apple has no problem selling ithings for $200-300-400 (16-32-64gb). Maybe it should be $199. Why is the Titan almost always $199?