Nokia just announced today that it is planning to cut another 10,000 positions globally by the end of 2013, as per is plans to “rescale the company.” The company also says that it plans to streamline its IT, corporate and support functions, along with the consolidation of manufacturing operations resulting in the closure of its manufacturing facility in Salo, Finland.
“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,” said Stephen Elop, Nokia president and CEO. “We intend to pursue an even more focused effort on Lumia, continued innovation around our feature phones, while placing increased emphasis on our location-based services. However, we must re-shape our operating model and ensure that we create a structure that can support our competitive ambitions.”
The company also announced a number of changes to its senior leadership team and 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 all effective from July 1st, 2012.
While, Jerri DeVard, Mary McDowell, and Niklas Savander will all step down from the Leadership Team effective June 30th, 2012. All three will continue in advisory roles while they transition their roles. The company further also lowered its outlook for its third quarter this year, saying that its Smart Devices business unit has been negatively affected, result of which company now expecting its non-IFRS Devices & Services operating margin in the second quarter to be below its first quarter.
Nokia expects further charges of approximately EUR 1.0 billion relating to restructuring activities in Devices & Services by the end of 2013 in connection with its updated Devices & Services operating expense target. This is in addition to cumulative charges of approximately EUR 900 million recognized as of the end of first quarter 2012 in connection with previously announced restructuring activities.
By the end of the first quarter 2012, Nokia had cumulative restructuring related cash outflows of approximately EUR 450 million. From the second quarter 2012 onwards, Nokia expects restructuring related cash outflows to be approximately EUR 650 million in 2012 and approximately EUR 600 million in 2013. Out of the total expected charges relating to restructuring activities of EUR 1.9 billion, Nokia expects non-cash charges to be approximately EUR 200 million.
