Nokia is cutting staff again, this time letting as much as 20% of its workforce go, and closing three plants.
Announcing its second quarter results, the cell phone manufacturer says it plans to rescale the company by making additional reductions in Devices & Services.
Nokia plans to pursue a range of planned measures including:
* Reductions within certain research and development projects, resulting in the planned closure of its facilities in Ulm, Germany and Burnaby, Canada;
* Consolidation of certain manufacturing operations, resulting in the planned closure of its manufacturing facility in Salo, Finland. The R&D efforts in Salo will continue;
* Focusing of marketing and sales activities, including prioritising key markets;
* Streamlining of IT, corporate and support functions; and
* Reductions related to non-core assets, including possible divestments.
As a result of the planned changes, Nokia plans to reduce up to 10 000 positions globally by the end of 2013.
“These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia’s long-term competitive strength,” says Stephen Elop, Nokia president and CEO. “We do not make plans that may impact our employees lightly, and as a company we will work tirelessly to ensure that those at risk are offered the support, options and advice necessary to find new opportunities.”
Nokia will also make some strategic investments, including investing strongly in products and experiences that make Lumia smartphones stand out and available to more consumers; investing in location-based services as an area of competitive differentiation for Nokia products and extend its location-based platform to new industries; and improving the competitiveness and profitability of its feature phone business.
To execute this strategy, Nokia is also making changes to its management team by tapping into a strong leadership bench at the company.
“We are increasing our focus on the products and services that our consumers value most while continuing to invest in the innovation that has always defined Nokia,” says Elop. “We intend to pursue an even more focused effort on Lumia, continued innovation around our feature phones, while placing increased emphasis on our location-based services. However, we must re-shape our operating model and ensure that we create a structure that can support our competitive ambitions.”
In Smart Devices, Nokia plans to extend its strategy by broadening the price range of Lumia and continuing to differentiate with the Windows Phone platform, new materials, new technologies and location-based services. In line with this strategy, Nokia today announced the planned acquisition of assets from Sweden-based Scalado, which currently has imaging technology on more than 1 billion devices. This acquisition is aimed at strengthening Nokia’s imaging assets.
Nokia’s location-based platform is expected to be another principal area of investment as Nokia plans to differentiate its portfolio of Lumia smartphones with leading location-based services including navigation and visual search applications such as the recently announced Nokia City Lens. Additionally, the company plans to extend its mapping technology to multiple industries to strengthen the platform and generate new revenue.
In Mobile Phones, Nokia intends to improve its competitiveness and profitability. Nokia aims to further develop its Series 40 and Series 30 devices, and invest in key feature phone technologies like the Nokia Browser, aiming to be the world’s most data efficient mobile browser. Early results of this innovation can be found in Nokia’s latest Asha feature phones which offer a full-touch screen experience at lower prices.