Nokia to close facilities, cut up to 10,000 jobs worldwide

June 15th, 2012 - 6:15 pm ICT by BNO News  

ESPOO, FINLAND (BNO NEWS) — Nokia, the world’s largest manufacturer of mobile phones, on Thursday said it will cut up to 10,000 jobs worldwide over the next year and close a number of facilities in Germany, Canada and Finland. It follows more than 7,000 job cuts announced last year.

According to a statement, the mobile communications giant plans these and other actions which are aimed at sharpening its strategy, improving its operating model and returning the company to profitable growth. “These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia’s long-term competitive strength,” said Nokia president and CEO Stephen Elop.

Among the company’s operational changes to save costs and streamline operations, Nokia announced the planned closure of its facilities in Ulm, Germany and Burnaby, Canada and its manufacturing facility in Salo, Finland. As a result, up to 10,000 employees worldwide will be laid off by the end of 2013.

Elop noted that the cellphone company, which is based in Espoo, Finland, remains focused on its smartphones and feature phones, including an increased emphasis on location-based services. With the announced measures, the company is expecting cost reductions of up to 1.6 billion euros ($2 billion) by the end of 2013.

In April, Nokia announced it suffered a net loss of €929 million ($1.1 billion) during the first quarter, representing one of the company’s worst ever quarterly results as sales plunged, especially in the smartphone market. Following Thursday’s announcement, the company’s share price plunged more than seven percent to €2.05 ($2.58).

In September 2011, Nokia announced the closure of its manufacturing facility in Cluj, Romania as its high-volume factories in Asia are providing greater scale and proximity benefits to key markets and suppliers, resulting in 2,200 job cuts. The company also announced it would close its operations in Bonn, Germany and Melvern, Pennsylvania, resulting in another 1,300 job cuts.

Earlier that year, in April 2011, Nokia announced a workforce reduction of about 4,000 employees, most of them in Denmark, Finland and the United Kingdom, to reduce operating expenses. The company also announced that around 3,000 employees in China, Finland, India, the United Kingdom and the United States would be transferred to outsourcing company Accenture.

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