Nokia articulates strategy, which includes loss of 10,000 jobs

Nokia has announced the planned loss of 10,000 jobs by the end of next year as it looks to reverse its declining business. While planning to significantly reduce its operating expenses, Nokia also announced an increased emphasis on location-based services.

The planned job losses are expected to come from the closure of its facilities in Ulm, Germany and Burnaby, Canada as well as in Salo, Finland. R&D efforts in Salo will continue though.

Nokia is also making changes to its management team.

"These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia’s long-term competitive strength," said Stephen Elop, Nokia president and CEO. "We do not make plans that may impact our employees lightly, and as a company we will work tirelessly to ensure that those at risk are offered the support, options and advice necessary to find new opportunities."

In Smart Devices, Nokia plans to broaden the price range of Lumia and continue to differentiate with the Windows Phone platform, new materials, new technologies and location-based services. In line with this strategy, Nokia announced the planned acquisition of assets from Sweden-based Scalado, which currently has imaging technology on more than one billion devices.

Additionally, Nokia plans to extend its mapping technology to multiple industries to generate new revenue.

In Mobile Phones, Nokia intends to improve its competitiveness and profitability. Nokia aims to further develop its Series 40 and Series 30 devices, and invest in key feature phone technologies such as the Nokia Browser.

Taking into account these planned measures the company now targets to reduce its Devices & Services operating expenses to an annualised run rate of approximately €3 billion (US$3.77 billion) by the end of 2013. This is an update to Nokia’s target to reduce Devices & Services operating expenses by more than €1 billion for the full year 2013.

Nokia also announced a number of changes to its senior leadership. The company 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.

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.

"Nokia is significantly increasing its cost reduction target for Devices & Services in support of the streamlined strategy announced today," said Timo Ihamuotila, executive vice president and CFO. "With these planned actions, we believe our Devices & Services business has a clear path to profitability. Nokia intends to maintain its strong financial position while proceeding aggressively with actions aimed at creating shareholder value."