Nokia Cuts 10,000 More Jobs

Nokia Corp. NOK1V.HE -16.28% on Thursday unveiled sweeping plans to reshape the Finnish company's ailing handset business, cutting 10,000 jobs, closing factories and research facilities, and replacing the long-standing heads of mobile phones and sales.

The company also warned its loss in the second quarter would be higher than it previously forecast—its third cut in earnings outlook in a little over a year. Nokia shares plunged following the announcement.

Nokia's Chief Executive Stephen Elop said Nokia's transition to a new phone software is taking longer than he initially thought and he stressed that all the changes under way are vital for the company's future.

The 10,000 job cuts, to be achieved by the end of next year, will help Nokia reduce costs by a further €1.6 billion ($2 billion) by 2013, Elop said. The company says they will cost some €1 billion to implement. The staff reductions come on top of close to 14,000 job losses announced last year.

Under Mr. Elop's watch, Nokia's staff count, including those at NSN, has fallen by almost 40,000 people. By the end of the first quarter, Nokia had 122,000 employees, 53,000 of working at Nokia's mobile devices business.

Nokia will close a research and development site in Germany, and another in Canada. It will also shut its biggest Finnish manufacturing plant at Salo, though it will keep its research and development operations there.

The company also made changes to its management lineup, losing a number of heavyweights. Head of markets and sales Niclas Savander, mobile phones head Mary McDowell, and recently appointed chief marketing officer Jerri DeVard will all step down by the end of this month.

Chris Weber, currently Nokia's North American head and a former Microsoft Corp. MSFT +0.48% veteran, will become head of markets and sales, while Timo Toikkanen, Nokia's head of business development, will take over as head of mobile phones. Tuula Rytila, head of business management at Nokia's smartphone unit, will be Nokia's new marketing officer.

Nokia held €4.87 billion in net cash by the end of the first quarter this year, down €709 million from the end of the fourth quarter and down 24% from the same time last year.

"If you don't want to gamble, stay out," the bank said.
—Denise Wall and Gustav Sandstrom contributed to this article.
http://online.wsj.com