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Nokia to cut workforce by 10,000 and sell Luxury Brand Vertu
Nokia to cut workforce by 10,000 and sell Luxury Brand Vertu
By: iMedia News Bureau

After a slew of losses, Nokia has made some tough decisions about how to move forward by announcing it will reduce staff by up to 10,000 people before the end of 2013. As a part of its cost-cutting strategy Nokia is close its factories in Finland, Germany, Burnaby, Ulm and Canada.

Two members of its top leadership team will leave - Mary McDowell, the head of the struggling mobile phones unit and Niklas Savander, head of the markets sector. The announcement comes only four months after Nokia announced that it will cut 4,000 jobs globally as it shifts device assembly to Asia.

As of March 31, 2012, Nokia employed 1, 22,148 people. Of these, 68,595 were employed by Nokia Siemens Networks.

The Finnish mobile phone maker said it aims to return the company to profitable growth by sharpening strategy and improving its operating model. Nokia plans to prioritize its key markets, streamline IT, corporate and support functions and reduce costs in its non-core assets.

Last year, Nokia was still the world's top cellphone maker with annual unit sales of some 419 million devices, but in the last quarter of the year it posted a net loss of €1.07 billion, a marked reverse from the 745 million profit year earlier.

Although the Finnish cellphone maker said it plans "to significantly reduce its operating expenses," it will continue to focus on smartphones as well as cheaper feature phones and intends to expand location-based services. Nokia said it is balancing its investment priorities and plans to rescale the company by making additional reductions in devices and services.

Nokia said this is an update to Nokia’s target to reduce Devices & Services (non-IFRS) operating expenses by more than 1 billion euro for 2013, compared to 2010 expenses of Euro 5.35 billion.

Nokia also announced plans to sell its luxury mobile phones business, Vertu to an European private equity firm EQT VI. Furthermore, the company has announced it will acquire specialists, technologies and intellectual property from mobile imaging company Scalado. The acquisition, which is expected to close in the third quarter of 2012, will help Nokia enhance imaging experiences for its Lumia devices.