Nokia continues to slash its workforce, announcing Thursday that it will cut 10,000 jobs by the end of 2013. The latest round of cuts is in addition to its previously announced plan to eliminate nearly 14,000 positions. Nokia says EVP of Mobile Phones Mary McDowell will step down at the end of the month, along with its executive vice president of markets, Niklas Savander, and Chief Marketing Officer Jerri DeVard. Timo Toikkanen -- the company's vice president for business development, programs and special projects -- will replace McDowell as the company struggles its jump start its smartphone sales. The company says it took a particularly hard hit in the second quarter of 2012 in its Smart Devices business unit. Its forecast for the third quarter doesn't look any better, with Nokia saying its profits will get squeezed even more than it originally anticipated. Perhaps what's the most unsettling is that Nokia admits its prospects for future smartphone sales "remains limited." In turn, that raises the question of whether there will be yet even more cuts beyond 2013.
"Nokia is significantly increasing its cost reduction target for Devices & Services in support of the streamlined strategy announced today," says Timo Ihamuotila, the company's CFO. "With these planned actions, we believe our Devices & Services business has a clear path to profitability. Nokia intends to maintain its strong financial position while proceeding aggressively with actions aimed at creating shareholder value."
Nokia's turnaround plan:
Restructuring Plans Revealed
- Reductions within certain research and development projects, resulting in the closure of its facilities in Ulm, Germany, and Burnaby, Canada.
- Consolidation of certain manufacturing operations resulting in the closure of its manufacturing facility in Salo, Finland.
- Focusing of marketing and sales activities, including prioritizing key markets
- Streamlining of IT, corporate and support functions.
- Reductions related to non-core assets, including possible divestments.
