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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.)
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?
What political party do you join when you don't like Bible-thumpers *or* hippies?
Whaaaaat?!?! Really? This is a tremendously unexpected turn of events that nobody outside of your boardroom dealings would have EVER suspected!
Microsoft should do a 2 for 1 purchase of Nokia and Rim, then finally they'll be able to make a superior phone that is constructed tough as nails while also having a solid keyboard and touchscreen.
Stephen Elop - The Trojan Horse of modern era.
Meanwhile, Microsoft, Apple, Samsung, and Google IP lawyers are circling to fight over the carcass (Patent Portfolio) of Nokia.
Pretty simple math. No matter how big you are, if you cant keep up with changing times, you go away.
---- Booth was a patriot ----
It's a shame to see Nokia falling apart. It was not long ago that they had the very promising n900. I was all ready to buy one of those until I found out that it wasn't available on my carrier of choice, and in fact the only carriers it was available on in my area were the ones with the poorest coverage.
a factory in Germany, Canada and Finland
That's some factory--Nokia must have invented some kind of trans-dimensional technology. Surely that's worth a few bucks to someone?
Nokia was working on another Linux based operating system. This is now stopped.
More insight into how the board of Nokia is being stacked with Microsoft cronies.
Another round or two like this and the company will be all executives, no workers. That should help get them going in the right direction.
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.
What do I know, I'm just an idiot, right?
They'd have been a latecomer to a saturated market. Windows may have been a risk, but at this stage, delaying entry into the android market for another year isn't going to be a huge cost.
It may well be a huge temporary cost if they will have to repay Microsoft for the billions they already received.
It's kind of hard to do this when Apple and Google have hired away all your best people. RIM, MS, and Nokia are all in the same boat - lots of interesting ideas but not enough talented people to deliver.
They also make incredibly popular low cost phones that sell millions in the developing world.
Have sold. But the latest figures for 2011 is that there's now 6 billion cell phone subscribers, or 86.7% of the world's population, though some have more one subscription for home and one for work. That means there's not many more new people left to sell to, while in established markets people now buy smart phones and dump their dumb/feature phones for practically nothing. So that market is dying very shortly too.
Live today, because you never know what tomorrow brings
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.
Beta is broken and the link to classic doesn't work. Stop wasting our time or there won't be anybody left here.
This is what the aircraft safety people call "controlled flight into terrain" when one flies a plane into the ground.
Elop is one hell of a pilot.
--
BMO
When Apple first announced the iPhone, Jobs said in an interview that he would be happy if the iPhone captured 3% of the global smartphone market. Mind you, at the time, the Blackberry and the Treo were pretty much the only smartphones that existed.
Nokia was at the time, the biggest provider of any type phones and Apple believed that they had no chance to compete in that market, especially since Nokia was making phones that cost a mere $20 after being subsidized by the carrier.
So, how did Apple, which started with a very meager outlook for sales, completely destroy not one, but at least two major cell-phone makers (RIM and Nokia)? Both of these companies are mere shells of what they once were, and Apple is stronger than ever.
How is Apple one of the biggest companies on the planet, making what are essentially digital "toys"? Very few people actually *need* a smartphone, but apparently, and even Apple didn't forsee this, people *want* a single device that can really do it all.
If telephones are outlawed, then only outlaws will have telephones.
The gist of it being that Windows isn't working, and Elop is killing any possible "plan B" for the company.
Ita erat quando hic adveni.
The fall of giants is tough. Nokias fall sounds like SGIs fall where project Fahrenheit sucked the last remaining useful IP out of the company before SGI went Jurrasic Park. Losing the R&D labs will mean that the next generation of phone-developers will not speak Finnish. Hey.. its that path they chose. What goes around comes around.
In our quest for purity, we are asked to don a red or a blue cap which is supposed to align to socialist-leaning (blue) against capitalist-leaning (red) doctrines, but of late, not combine the two. Its time to realize that any successful society will need to embrace elements of both socialism and capitalism to be remain sovereign. Get that Mitt? Get that Barack?
No that was the assessment of Wall Street Investors after the announcement of Nokia's deal with Microsoft. Their assessment was correct. You're just an ass.
They'd have been a latecomer to a saturated market.
No, they wouldn't. This is about saving what they have (or had) that Android has largely taken off them, plus they would have had a platform with a lot of applications. As it stands now they've just pissed that away.
Windows may have been a risk, but at this stage, delaying entry into the android market for another year isn't going to be a huge cost.
They'll be bust by then.
That's what happens when a company sells its soul for buck. Google didn't. As I see, there are 2 evils, which companies tend to sell their souls just to be there: Facebook and China.
Actually that's a smart move. Nokia's making very little on those tight margin devices. If Nokia wants to save money they'd stop trying to pursue those devices.
Non impediti ratione cogitationus.
And then screw it up unto death, like everything else.
Everybody here is always talking about the Microsoft deal or how good was the hardware Nokia made.
But something that is never mentioned is how Nokia closed a digital store that because of their DRM implementation, denied customers of their legitimate purchases.
These are the kind of things that usually causes boycotts, for example a few guys get the message that Rock Band will stop working on the iPhone, and everybody in the world is talking about it. Nokia cut access to 52 games, and nobody cared. Well, I lost 21 purchases that day so I care.
Obviously if nobody cared for what Nokia did, that only could mean that they didn't had a big following. I was a Nokia fan, but now I won't give them a cent.
For me Nokia didn't had a future no matter what choice of operating system they took.
You may be right, but Nokia still had a fat chance of comeback with MeeGo, as already proved by Nokia N9 (I own one, and I easily claim it to be better than most, if not all, of the current smartphones due to its intuitive Swipe UI). Who was saying no to building Windows smartphones? But Elop apparently wasn't satisfied with only that. He had to kill the burning platform (Symbian) as well as the blooming platform (MeeGo). That is what has pushed Nokia off the cliff, IMO. I may seem to blame Microsoft (I actually do it inside my mind, though, having been a genuine Nokia fan since I became aware of phones), but the fact still stands that Elop cruelly slaughtered any remaining chances that Nokia had, with or without Microsoft behind him.
No it's not editorial spin. The NY Times appears to quote Nokia: "The company also warned investors that 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."
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?
This is a tough slog today, but just keep repeating these bullet points:
* Elop has done nothing wrong
* Nokia was already heading for a train wreck before MSFT ever got involved with them so it is not Microsoft's fault at all, in any way, shape, or form.
* Windows Phone will be a success because IDC says so
* There is a strong rumour that there will be a government bailout in Finland but we can't say from whom or give any facts to substantiate that
* Elop has done nothing wrong
* It is all Nokia's fault
* Losing a few thousand Finn, Canadian, and German mobile phone R&D folks will improve our R&D efforts worldwide
* Partnering with Microsoft is a tremendous opportunity if only the other companies would meet the same standard of excellence and do their part.
* Elop has done nothing wrong
6 billion cell phone subscriptions seems quite high. Citation needed on this one. Even if you count more than 1 per person. That number, wherever you got it from, must be skewed by people who got pay-as-you-go phones, and then trashed them with some remaining balance, or criminals who get burner phones and throw them out after a couple weeks. Once you discount children, elderly, and extremely impoverished people, I don't see how there could possibly be 6 billion active cell phone subscribers. I know plenty of people without cell phones right here in Canada, and an even larger number of people without smart phones. There's lots of room for the market to grow.
Anthropic principle: We see the universe the way it is because if it were different we would not be here to see it.
In the biggest smart phone markets, except for a few strange people like us, it is carriers not end users that buy phones. They want to offer contracts with the best buzzword compliance at the lowest cost and the biggest opportunity to restrict users so they won't use up all their bandwidth allowances. "OS-agnostic" isn't going to appear on a carrier site near you, whereas "Built-in Facebook" and "12MP camera" will.
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
The People's flag is deepest red
It shrouded oft our martyred dead
Though cowards scoff and traitors sneer
We'll keep the red flag flying here.
For a capitalist piss-take to the same tune (Tannenbaum)
The working class can kiss my ass
I've got the foreman's job at last....
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
You don't know what his contract says. If it says in the small print "Get Microsoft to buy all our shares" and the idiots didn't think of the best way to do that (make them worthless) then they have nothing to sue about. A lot of bonkers management decisions make perfect sense - if you know what they were contracted to do.
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
Money is money. If the phones are profitable, then continue to pursue them while you move in another direction. Consider Samsung, they are the smartphone leader right now, shipping 38 million smartphones last quarter (compared to Apple's 31 million). They also shipped 48 million dumb phones during the same period. I don't hear anything from them about dumping their dumb phone business. It goes to show that you can be both a smart and dumb phone company.
This reminds me very much of the recent HP shortsightedness with their low margin computer business.
Nokia lowered their forecast due to "increased competition". Isn't that just a backwards way of saying "our inability to compete"? Other companies are thriving (or at least surviving) despite all this competition.
Slashdot: come for the pedantry, stay for the condescension.
I wouldn't exactly call "selling off the patent portfolio to Google" no possible "plan B." That route is only profitable if the proceeds of the sale don't have to be spent on workers' salaries. The layoffs are required so the spoils are entirely given to the investors.
Seth
$5 / month hosted VPS on linux = awesome!
I have been thinking this entire thing smells like Elops entire goal was to drive stock so low that Microsoft can buyout Nokia on the cheap and have their own cell phone manufacturing division, ala Apple and now Google.
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.
When all you have is a hammer, every problem starts to look like a thumb.
Nokia's seems to be to serve as a warning to others.
Help stamp out iliturcy.
Yup, somewhere at home I have a box of pencils and a box of toothpicks. Neither cost me much, and neither is what I'd call a growth market. And yet, I'm sure somebody is making good money selling each of them.
If you need venture capital then these aren't products you should go after, but if you want to stay alive, there is no reason to give them up.
lumia 900 is nice, but to recover nokia needs a string of ultra-high-end windows phones with features nobody else has (pureview, rich recording are the obvious candidates). unless this happens, why there's no reason buy a nokia if i can get a decent android at the same price.
Wealth is the gift that keeps on giving.
They'd have been a latecomer to a saturated market.
A market that people are actually interested in, and one where products actually sell.
The people at Redmond had this planned from the beginning and the greedy selfish board of Nokia didn't see this coming. Elop's job was to renovate Nokia to a shadow of its former glory, to lower its market value enough for Microsoft to just grab and eat it like a little part of breakfast. There will be no more manufacturing jobs in "expensive" Finland, just what the greedy people in Redmond do not want. Maximize profits. What I would like to see here is something that the people at Microsoft would not expect.. ..if one of the others, the Big Ones, that still perhaps conduct "ethically", would go ahead and purchase Nokia in front of Microsoft..
This looks like the start of the extinguish phase of Microsoft's plan.
As a Finn I am really fucking pissed off at Elop and the Nokia board who let this happen.
>
No Windows phone for ONE YEAR
This is a bit optimistic... Nokia still has NO WINDOWS PHONE to compete with. The current models have an OS that Microsoft is publicly stating is not quite there yet, and current phones will NOT be upgradeable to the "good", new version that is coming real soon now. So if you buy a Nokia phone, you are getting something with no future in 6 months, or a year, or ???
Wait, this is the company running ads claiming all smartphones up to this point have been beta tests?
oh wow.
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
Just another step in the plan to screw Nokia the same way they did Sendo. Nokia is so fucking stupid for trusting Microsoft, after all history repeats its self.
---- GENERATION 26: The first time you see this, copy it into your sig on any forum and add 1 to the generation.
Nokia passed at the chance to use Android because they didn't want to be "just another Android maker", and instead basically became "just another WP7 maker", I mean, you can say whatever you want about the Nokia MS deal but at the end of the day MS will discard the Nokia carcass once they're done sucking whatever's left out of it.
Nokia had nothing to lose by betting on both platforms.
Whatever is worth something can be trickled out to Microsoft while Nokia is still standing. Someone presenting a defence could say there's nothing illegal with Elop reluctantly laying people off and kind heartedly recommending the best of them to his former colleages at Microsoft.
Anyway, who does the time? The board that brought him in are complicit in the deliberate destruction of the company.
Qt was bought during the term of the previous CEO, so modern management training tells the new CEO that he has to assert his dominance by pissing all over it.
We still have barbarians even if they are physically wimps with a barbarian mentality.
Canada only has ~70% market penetration, one of the lowest rates on earth, definitely low for a developed country.
Most of western Europe is 125-150%, US, AUS are ~100%, Russia is 150%, middle east is similar. South America and Indonesia, Japan, are mostly ~100%.
India and China are both at ~75%, which is a massive number on their own.
The numbers are active subscriptions, so If you have a personal mobile and one from work, you're at 200% personally... which is how you get >100% penetration.
Sent from my PDP-11
>>They're also getting rid of those popular low cost phones that have been selling in Africa and India
No they aren't! It's all they have left and the plan is to stick with S40/NOS on the low end (with a Smarterphone UI) and WP7 on the high end
http://www.theregister.co.uk/2012/06/14/nokia_software_purge/