Nokia axes 1,800 jobs
The Finnish phone giant Nokia is to cut 1,800 jobs as it tries to restructure its smartphone business, despite announcing a strong rise in profits.business Updated: Oct 22, 2010 20:36 IST
The Finnish phone giant Nokia is to cut 1,800 jobs as it tries to restructure its smartphone business, despite announcing a strong rise in profits.
The company reported a third-quarter net profit of €529m, compared with a net loss at the same time last year of €559m due to restructuring costs. Net sales grew 5 per cent to €10.2billion. Nokia shares rose by 7 per cent on the Helsinki stock market on the news, where the results were seen as better than expected.
Nokia sold 110.4 million devices in the quarter, up 2 per cent on the same period in 2009. But the company warned that it expects to sell fewer devices —between €8.2 billion and €8.7bn worth — in the fourth quarter. It slightly revised previous estimates upwards, saying it now expects the global device market to grow more than 10 per cent this year, while cautioning that it will lose market share in the full year.
“Some of our most recent product launches illustrate that we have the talent, the capacity to innovate and the resources necessary to lead through this period of disruption,” said Stephen Elop, Nokia's new Canadian chief executive recruited from Microsoft.
Elop has warned the company that it needs to take advantage of the disruption in the mobile market to prosper. He has moved quickly to focus the company on its smartphone business, which is seen as an essential growth path for the mobile handset division of the company, which accounts for most of its revenues.
Nokia employs about 131,500 people, with 66,000 of those at its Nokia Siemens Networks joint venture, which focuses on telecoms networks. Though Nokia's smartphones have about 40 per cent of the global market, the iPhone has set the standard for smartphones for many design-conscious consumers, while BlackBerrys have been the favourite of the corporate set.
First Published: Oct 22, 2010 20:36 IST