Beleaguered Nokia to axe 20% of workforce, close only plant in Finland; stock crashes

“Nokia plans to cut one in five jobs at its global cellphone business as it loses market share to rivals Apple and Samsung and burns through cash, raising new fears over its future,” Tarmo Virki reports for Reuters.

“In a second profit warning in nine weeks, Nokia said on Thursday that its phone business would post a deeper-than-expected loss in the second quarter due to tougher competition,” Virki reports. “Once the world’s dominant mobile phone provider, Nokia was wrongfooted by the rise of smartphones and is struggling to keep up with Apple, Samsumg and Google. It is also losing market share in cheaper, more basic phones.”

“Chief Executive Stephen Elop is placing hopes of a turnaround on a new range of smartphones called Lumia, which use largely untried Microsoft Corp software. But Lumia sales have so far been slow, disappointing investors,” Virki reports. “Shares in Finland-based Nokia were down 10.5 percent to 1.99 euros, below the psychologically important 2 euros mark last, not seen since 1996. The stock has crashed more than 70 percent since it announced the switch to Microsoft’s software in February 2011.”

Virki reports, “The job cuts, which include the closure of Nokia’s only plant in Finland, bring total planned cuts at the group since Elop took over as chief executive in 2010 to more than 40,000… Nokia also said it would sell luxury phone business Vertu to venture firm EQT and revamp its management team.”

Read more in the full article here.

MacDailyNews Take: Ah, Microsoft’s Midas touch. Good luck to the affected employees.

Related articles:
Microsoft’s Nokia Lumia says the best smartphone is Apple’s iPhone – May 14, 2012
Fox News reviews Microsoft’s Nokia Lumia 900 Windows Phone: ‘Disappointing’ (with video) – May 12, 2012
Beleaguered Nokia hit with class-action lawsuit over weak Lumia Windows Phone sales, deteriorating market share – May 4, 2012
Beleaguered Nokia dumps sales chief as Lumia Windows Phones flounder, promises more cost cuts after Q1 loss – April 19, 2012
Euro carriers: Beleaguered Nokia’s Windows Phone not good enough to compete with Apple iPhone or even Samsung phones – April 17, 2012
Mossberg reviews Microsoft’s Nokia Lumia 900, can’t recommend it over superior iPhone 4S – April 5, 2012

27 Comments

      1. To be fair to Elop and presumably Mitt, companies like Nokia were on a burning platform and were going to shed jobs or go out of business no matter whom was running the business. If deep cost cuts, including deep job cuts turn a failing business into a sustainable one, then that’s better than a company that goes the way of Nortel, etc.

        1. Great job Elop! Couldn’t have planned a Nokia quicker demise scenario better myself. BWAHAHAHAHAHA!!!!

          Redmond, WA is apparently the place where tech losers hang out or partner with and wait while their lifeblood slowly drips away. Peter Principle in action.

  1. Damn you MDN! I wasted 10 minutes reading the difference between “affect” and “effect” – I thought we had you…how could I have ever doubted your mad grammar skillz.

  2. I was skimming and accidentally misread “largely untried Microsoft Corp software” as “largely untried Microsoft Crap software.” MDN’s influence is getting to me.

    1. LOL

      This is really going to scare people away from Windows Phone. “Look what happened to Nokia,” they’ll say.

      Having your software come in and be responsible for the destruction of a once-strong company would be a bit of a blotch on the old resume, I’d think.

  3. So as Apple fans, what would you rather have, a stronger RIMM and Nokia or what we have now, a strong Android and Samsung? I think I would rather have the former.

  4. How the mighty have fallen. Apple roadkill continues. Palm, Rimm & Nokia = the best shorts over the last 2 years. I wonder what companies will be affected by iTV? Any thoughts anybody?

  5. Nokia, smoked by Windows Phone.

    Seriously, imagine if Nokia had of switched to an Android strategy or a two pronged Android and Windows Phones strategy. Would they be in this mess now? Who does Elop work for Nokia share holders or Microsoft.

    1. You are asking who a CEO works for? In the American model they work for themselves and their crony entourage- not the shareholder or customer. That was what was so unusual about Steve Jobs.

  6. Did you read the comments in the original article?

    Apparently, this is all part of a M$ plan to shrink Nokia and reduce the cost of acquisition….it seems to be working, except soon there will be nothing left.

    “I like our strategy, I like it a lot.”

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