Nokia plans to cut more than 10,000 jobs at its global cellphone business and also shut down some units as it loses market share to rivals Apple and Samsung and burns through cash, raising new fears over its future.
A corporate logo is displayed at the Nokia flagship store in Helsinki. Credit: Reuters/Bob Strong
The company also announced major management changes.
second profit warning in nine weeks, Nokia said on Thursday that its phone business would post a deeper-than-expected loss in the second quarter.
"The job cuts and profit warning underline the seriousness of the challenges Nokia is facing, particularly in light of the eye-watering competition from Apple and Samsung," said Ben Wood, head of research, CCS Insight.
The company said its restructuring-related cash outflows would be around €650 million in the remaining three quarters of 2012 and around 600 million in 2013.
Shares in Nokia has crashed more than 70% since it announced the switch to Microsoft's software in February 2011.
No significant impact on India
The changes at the global level will not have any significant impact on Nokia's India operations, the company said. "Today's planned changes will impact Nokia employees throughout operations globally. While we anticipate impact at other sites, we don't see significant impact on India operations," a Nokia spokesperson said.