Nokia To Cut 10,000 Jobs and Close 3 Facilities

parallel_prankster writes "NY Times reports that Nokia said on Thursday it would slash 10,000 jobs, or 19 percent of its work force, by the end of 2013 as part of an emergency overhaul that includes closing research centers and a factory in Germany, Canada and Finland, and the departures of three senior executives. The company also warned investors its loss was likely to be greater in the second quarter, which ends June 30, than it was in the first, and that the negative effects of its transition to a Windows-based smartphone business would continue into the third quarter. Nokia, based in Espoo, Finland, posted a loss of €929 million, or $1.2 billion, in the first quarter as sales plummeted 29 percent. Once the undisputed global leader in the mobile phone business, Nokia has been outcompeted by Apple, as well as by Samsung and other makers of handsets running Google's Android operating system." (Here's another source, if you're hit by the NYT paywall, and the company's own positive spin.)

Comments

No good news in that

[crazyjj]

A lot of Apple fans and MS haters may be tempted to cheer, but the loss of 10,000 jobs in this economy means 10,000 families whose lives will been up-ended and that sucks no matter what phone you're rooting for.

And what's more, according to the article, a third of these job losses will come from Finland, with more in Germany and Canada. Decent western factory jobs seem to be going the way of the Dodo bird. Are there any phones still actually being manufactured in the first world? Even if Nokia recovers, what are the odds that those jobs won't reappear in Finland, but in China?

Re:No good news in that

[Nursie]

Cheer?

I can hate on MS as much as the next guy, but this is sad whatever way you spin it. Nokia used to create great products and be a byword for quality, reliable, cutting edge phones.
Then they lost their way, management started all sorts of retarded internal competition games and the company just started chucking out hundreds of near identical handsets.

Even then they had a significant market lead, even in the smartphone sphere, but they were losing it. This is when Elop came along and really killed them, jumping straight into bed with his old bosses and sealing the fate of a once-great european tech powerhouse.

It's a shame to see such an icon driven into the ground.

Re:No good news in that

[IAmR007]

Windows phones was definitely the wrong way to go. Getting Qt working well on Android and iOS and marketing it as a platform could have been a lot more successful. Being able to use the same core code on multiple platforms is a big advantage. Instead, they chose a dying mobile OS.

Re:No good news in that

[localman57]

The good thing about this will be that eventually all socialism will end....

No it wont. Because some socialism is good. Public schools are good. Public roads are good. Public health initiatives are good. You have some socialist countries now that are highly uncompetitive. And you have highly capitalist countries, such as China, which are highly competitive, but creating externalities that make their current path unsustainable. Somewhere in the middle, a resonably free enterprise system with some government sponsored investment and a public safety net is where you're going to get the best overal quality of life over the span of decades.

Re:No good news in that

[plover]

It may have been obvious, but it was obvious long before Microsoft had anything to do with it, and this certainly isn't Microsoft's fault. Remember the Burning Memo? Nokia has been faltering ever since the Chinese factories have been able to create their own lines because of the cell phone chipset availability.

Nokia took the Microsoft deal because it became evident to them that Nokia's own OS was no longer a selling point, so it didn't make sense to further invest in it. That saved them a few kroner in the short term, plus there was a longshot chance that Windows Phone 8 could have made a dent in the market. It obviously hasn't yet, nor did the tech community expect much different, but one never knows what the phone market will look like in five years.

Re:No good news in that

[Anonymous Coward]

They could easily choose a different strategy and save the company. E.g. they could become OS-agnostic, just like Samsung: produce N9-like phone in both Maemo, Android and WP7 version, and see what sells best. I'm 100% sure lots of people would buy Android version of this phone because of the great looks and mature OS.
Killing Symbian too early, killing Maemo right after it was finally ready to sell and going to WP7 only was the most stupid decision ever.

I hope they eventually going to realize it and give that infiltrator from Microsoft the treatment he deserves.

Re:No good news in that

[Penguinisto]

They brought it on themselves, and have only themselves to blame.

In all seriousness, Nokia sat around on its ass all smug and secure for way too long after the iPhone detonated, then redefined the market. Samsung, HTC, and many others busted ass to remake themselves and their products into credible contenders. Nokia sat around and watched their R&D flounder around, thinking they had all the time in the world to do something about it, all while pointing at Symbian's (then) massive dominance of the global smartphone markets. They then had a chance to make a clean break and start fresh, but they decided to back the wrong horse (with a nudge from their new Microsoftie CEO, natch).

Moral of the story? Apparently it's two-fold:
1) If you're on top, don't sit around on your ass all complacent about it.
2) Never hire anyone who has previously worked as a Microsoft executive. They *will* fuck you over.

Re:No good news in that

[Wansu]

  Then they lost their way, management started all sorts of retarded internal competition games ...

Bad management is why most of the high paying jobs have disappeared over the last several decades, due either to incompetence, crookedness or a combination of the two. Nokia is just the latest in a long line of mismanaged companies going belly up.

Re:No good news in that

[plover]

They could go Android, sure, but Android phones are almost commodity phones, where the handset manufacturer isn't adding enough value to make them differentiators. That means as a customer, I could pick up an LG or HTC or Motorola or Samsung and get a pretty similar phone. And that means they all compete on price. That puts the Nokia phones up against the manufacturing might of China, which means that margins would start out razor thin and fade quickly to non-existent.

Symbian appealed to a hundred thousand early-adopter phone geeks, but they were not getting any mass market share from the first-time smartphone buyers, who were heading straight to Android or iPhone (depending primarily on the contents of their wallets.) Maemo would have cannibalized that market, but would not have taken any buyers away from the two big players. The WP7 deal came with the backing of Microsoft, which provided a lot more marketing clout than Nokia is capable of delivering these days.

When you're trying to compete, it's best to have a differentiator that people will actually pay for. Symbian was no longer it, and Maemo would never have been it. They bet that WP7 might have been it. It's not looking great so far, but Microsoft is a lot better backed than anyone else courting Nokia.

An award to Stephen Elop..

[GhostIdentity]

Stephen Elop - The Trojan Horse of modern era.

Re:An award to Stephen Elop..

[oh_my_080980980]

I know Microsoft has alot of apologists but this is amazing.

Investors did not agree with the deal and the chickens are coming home to roost. EVERYONE knew the deal was bad.

1. No Windows phone for ONE YEAR. No product in one year is a lifetime in the smartphone market. 2. Killed off Symbian. Their existing lines of phones were selling. Their customer base starting jumping ship since those phones were being killed off for Windows phones that were yet to be seen.

Every analyst knew the timeline was extremely bad for Nokia. Nokia could have survived had they not made the deal and worked on their own products.

Typical

[JustAnotherIdiot]

CEO and board members make a bad decision, the workers at the bottom end up paying for it.
Best of luck to those being let go.

Re:So what is your utopian alternative?

[SgtChaireBourne]

They're also getting rid of those popular low cost phones that have been selling in Africa and India. Elop is killing all possible ways to save Nokia and is actively ruining the company. Other analysts don't see Nokia returning to profitability devices in the foreseeable future either this year or next. There's nothing left to save. The pre-Microsoft Nokia is already dead and gone. There's nothing to rejoice about, it's just a fact.

Shareholders should sue Elop

[JDG1980]

Stephen Elop's decisions as Nokia CEO indicate that he is placing the well-being of another company (Microsoft) over the well-being of the company he's supposed to represent. The result is the $1.2 billion quarterly loss mentioned in the original post. This loss is, in large part, a result of Elop's breach of his fiduciary duty to Nokia. Why haven't the shareholders sued him?

Re:So what is your utopian alternative?

[Tough Love]

It is now abundantly clear that Nokia needed to get on board with Android. Sure, they would likely end up with less than a majority share but their name recognition, distribution network, engineering and let's admit it, build quality, would ensure a solid, respectable share. Better than nothing, which is what they will have if they don't fire Elop.