Nokia: We’re going to fire 10,000 people and change some of the senior management

Nokia has just issued what’s quite possibly the most depressing press release we’ve ever seen from them. There’s a lot to digest, so let’s go slowly. Starting with the job cuts, Nokia says they plan on eliminating 10,000 positions by the end of 2013. The factory that’s in Salo, Finland will be shut down, that’s been confirmed. There will still be an R&D facility there, but it’s not known how many people it will employ. The R&D facilities that are in Ulm, Germany and Burnaby, Canada however … they’re being axed. Vertu is gone, it’s going to EQT VI, who is a European private equity firm. Nokia has also announced that they’re going to buy acquire a ton of Scalado’s assets, the imaging company that’s based out of Sweden and is responsible for things like zero shutter lag and that cool “Remove” prototype.

In terms of the company’s leadership, a lot of senior people are leaving. To quote the PR:

“Jerri DeVard steps down as chief marketing officer; Mary McDowell steps down as executive vice president of Mobile Phones; and Niklas Savander steps down as executive vice president of Markets.”

And here’s who is going to replace them, along with some new appointments:

“Nokia announced that it has appointed Juha Putkiranta as executive vice president of Operations; Timo Toikkanen as executive vice president of Mobile Phones; Chris Weber as executive vice president of Sales and Marketing; Tuula Rytila as senior vice president of Marketing and Chief Marketing Officer; and Susan Sheehan as senior vice president of Communications.”

The bad news doesn’t stop there. Here’s what the company says about their present situation and what’s going to go down in Q3 2012:

“During the second quarter 2012, competitive industry dynamics are negatively affecting the Smart Devices business unit to a somewhat greater extent than previously expected. Furthermore, while visibility remains limited, Nokia expects competitive industry dynamics to continue to negatively impact Devices & Services in the third quarter 2012. Nokia now expects its non-IFRS Devices & Services operating margin in the second quarter 2012 to be below the first quarter 2012 level of negative 3.0%. This compares to the previous outlook of similar to or below the first quarter level of negative 3.0%.”

There’s going to be a call breaking all of this down in a few hours. We’re going to be listening to it. Should any new information surface, this article will be updated.

Update: Regarding Scalado, we asked Nokia whether they purchased the company or not. Here’s the definitive answer:

“No, we’re not buying Scalado AB. Scalado AB will continue to exist. All present customer agreements and obligations will remain with Scalado AB. The main task of Scalado AB will be to continue to work with its customers honoring its delivery and support obligations and fulfilling any and all obligations in relation to its existing customers.”

  • Anonymous

    Thats bad for the 10,000 people, good for the company and shareholders. The giant that nokia is, cant survive. Its like a very big dinosaur. It cant run, cant move and cannot attack until it sheds weight.

    • Anonymous

       Of course, Nokia could sell devices with an operating system that people actually want to buy, but that would be just foolish, right?

      This focus on bean counting and cutting costs is all well and good, if only the company had such razor sharp intelligence when it came to offering products that people want to buy. Cutting costs will only keep Nokia afloat for so long – generating revenues is what Nokia need to do first and foremost, and selling products that people want is one way to achieve that, no matter what OS they contain.

      Instead the management continue to fight an uphill battle to get buyers to invest in something that clearly isn’t wanted. By closing these factories and R&D centers, Elop is effectively closing down all options other than Windows Phone – it’s suicidal, reckless and one day I won’t be surprised to discover it was also illegal.

    • Patrick Soeder

      “good for the company and shareholders” – In a “normal” situation I would agree but considering previous cuts I have the feeling that Nokia isn’t cutting away the fat from the bones but instead too much of the meat.

      What is left of Nokia today? Well-paid board members? Same/similar people that neglected the situation before Mr. Elop arrived, ie fat-on-the-bone.

  • Anonymous

    It’s like watching a massive slow motion implosion.

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  • It’s unfortunate to see Nokia failing so badly. On the other
    hand, among all the other cuts, they are finally axing Nik Savander and Mary McDowell, two of the main
    perpetrators of Nokia’s inability to act.
    For most of my time at Nokia, I had a quote on my desk where Mary
    McDowell referred to the iPhone as a “toy”. And when the iPad announced,
    I personally spoke to Nik Savander about how “vertical markets” would
    be the key to the iPad’s success and how important it was to get
    “vertical market” apps (like doctor’s office support apps and the like)
    onto Nokia’s phones. Think it ever happened?
    Not only was Nokia years late reacting to iPhone (and later, Android)
    but the leadership there was culturally unable even to see the
    implications of these new devices. I left Nokia shortly after my failed
    conversation with Mr. Savander when it was clear that the lack of vision
    at the top was going to kill the company.

     

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