Nokia stock down 12% in early trading

By Big Jim Donahue

Nokia Corp, the planet’s top cellphone maker last year, announced on Thursday that it would eliminate 10,000 jobs by the end of 2013. That news, coupled with its warning that the second quarter loss from its cellphone division would be bigger than expected, sent their stock prices reeling. Those layoffs bring total planned job cuts at the group to more than 40,000 since Stephen Elop took over as CEO in 2010. All this is part of a planned company overhaul, which includes factory closings in Germany, Canada and Finland as well as three senior executives moving on.

CEO and president Stephen Elop said in a statement today, “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,” adding, “However, we must re-shape our operating model and ensure that we create a structure that can support our competitive ambitions.”

This in response to Samsung and Apple’s most recent increase in market share.

Nokia also announced that they would save €1.6 billion from the job reductions and the closing of the facilities in Ulm, Germany and Burnaby, Canada in addition to a handset factory in Salo, Finland.

Their problems began in February 2011 when Nokia and Microsoft announced a partnership to produce a line of smartphones called Lumia, running the Windows operating system, while retiring their own very popular Symbian system, in an effort to allow the Nokia Lumia 900 to increase its share of the market.

“With these planned actions, we believe our devices and services business has a clear path to profitability,” the Nokia CFO Timo Ihamuotila said in a statement. “Nokia intends to maintain its strong financial position while proceeding aggressively with actions aimed at creating shareholder value.”

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