LOSS-MAKING Finnish phone maker Nokia tied its hopes of a turnaround to its Microsoft-based Lumia range yesterday as it unveiled a further 10,000 job cuts and a management shake-up.
The firm will cut one in five jobs and close its only plant in Finland as it desperately tries to return to profit before its cash runs out.
It also announced a raft of appointments to its management team, drawn from the company’s own ranks, as well as the acquisition of a technology firm to support the Lumia handsets.
But its share price took a hit as it warned its restructuring will cost a further €1 billion (£800 million) over the next 18 months. It was the firm’s second profit warning in nine weeks.
Chief executive Stephen Elop has now slashed 40,000 jobs at the once-mighty firm since he was brought in from Microsoft less than two years ago. It is not yet clear how the latest cuts will affect Nokia’s 1,100 UK staff.
Elop has been trying to rescue Nokia’s fortunes after rival Apple stole a major lead on it with the launch of its market-leading iPhone in 2007.
The Finnish firm, which had been a dominant player in the early smartphone market, has also been squeezed by Asian rivals such as HTC and Samsung. Nokia lost £760m in the first quarter of this year alone.
Elop pursued an alliance with his former employer and controversially ditched Nokia’s own Symbian smartphone operating software in favour of Microsoft’s largely-untried Windows Phone system.
Sales of the new Lumia phones have so far fallen short of expectations but yesterday Elop re-iterated his commitment to the strategy, pledging to cut more “non-core” operations.
He said: “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 we create a structure that can support our ambitions.”
Nokia announced it was buying Swedish imaging specialist Scalado, saying it will use its technology to offer more sophisticated functions for customers taking photographs and videos on their phones.
At the same time, Nokia sold its UK-based luxury phone business Vertu to private equity group EQT. Vertu makes some of the world’s most expensive mobile phones, often featuring crystal displays, sapphire keys and £200,000 price tags.
No figure was given for either transaction.
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