No doubt this has to be happened; Moody’s Investors Service has downgraded the long-term senior unsecured ratings of Nokia to Ba1 from Baa3 and its short-term senior unsecured ratings to Not-Prime from Prime-3 after the Finnish mobile giant cut 10,000 more jobs. The outlook on all ratings remains negative.
“Today’s rating action reflects our view that Nokia’s far-reaching restructuring plan — which involves drastically downsizing its infrastructure by focusing its direct marketing on fewer markets, streamlining support functions and reducing investments in certain R&D projects in order to realize additional fixed cost savings of up to EUR1.3 billion by the end of 2013 — delineates a scale of earnings pressure and cash consumption that is larger than we had previously assumed,” says Wolfgang Draack, a Moody’s Senior Vice President and lead analyst for Nokia.
Nokia mid-this week announced that it is going to cut 10,000 positions globally by the end of 2013, as per is plans to “rescale the company.” The company also planning 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.
