Nokia feels the pain of market slowdown, hands out 600 pink slips
By Will Park on Tuesday, November 4th, 2008 at 12:33 PM PST In Announcements, Financial, Nokia
It was only a matter of time before the slowdown in global mobile growth hit the big-boys where it hurts the most - their bottom line. As the global economy threatens a planet-wide recession that likely further dampen growth in mobile phone sales, it’s hard to see the light at the end of the tunnel. So, in an effort to hedge investments in their bread-and-butter feature-phone (dumbphone) market, Nokia (NYSE: NOK) has announced that they’ll be cutting almost 600 jobs throughout its Market unit and Nokia Research Centers.
The announcement comes on the heels of Nokia’s 30% profit losses in Q3 2008 that translated to a slip in the company’s global mobile phone market share.
The smartphone segment has defied the general downward trend that has affected the “dumbphone” market, but Nokia’s heavy reliance on the feature-phone market has exposed the company to significant losses. So much so that Nokia will be pink-slipping 450 employees in its Market unit and 130 employees in Nokia Research Centers. And another 35 jobs will be cut in an effort to reorganize Nokia’s global process operations. The announcement comes as Nokia makes a renewed push to cater to the emerging markets that drive the Espoo-based company’s market share.
Nokia will be shuttering the doors to its Turku research facility in Finland, opting to cut costs by transferring operations to its Salo-based research center. The Turku facility will close down by the end of Janurary, affecting some 220 additional employees. The Finnish cellphone manufacturing giant says the move will help Nokia “sharpen its focus on fewer but stronger research areas.”
Juha Äkräs, Senior Vice President, Human Resources, Nokia, says that:
“Today’s changes are part of Nokia’s constant renewal where it is important to be close to our customers and ensure that our people are able to focus on the key business priorities. Also, our aim is to find alternative work within Nokia for as many employees as possible.”
Of course, there’s no mention of how much Nokia’s bottom line affected the company’s pre-holidays decision to hand out hundreds of pink-slips.
[Via: Cellular News]
