Earnings up but Nokia to cut 1,800 jobs

HELSINKI: Nokia Corp is moving quickly to restructure its lagging smartphone business under new CEO Stephen Elop. It will lay off 1,800 people even as its third-quarter earnings bounced back from a year-ago loss.

The world’s largest mobile phone maker reported third-quarter net profit of 529mil euro(RM2.6bil). The profit compares to a net loss of 559mil euro (RM2.7bil) in the third quarter last year.

Net sales in the quarter grew 5% to 10.2bil euro (RM50bil).

Nokia’s profits were stronger than expected and its stock jumped 7% to 8.25 euro (RM40) in Helsinki.

The company said it is cutting jobs as it shakes up product development in its Symbian smartphone business and as it struggles to cope with competition from Apple’s iPhone, Research In Motion’s Blackberry and Google Inc’s Android software.

Nokia employs about 131,500 people, with 66,000 of those at its Nokia Siemens Networks joint venture.

It said it will “accelerate its transformation and increase effectiveness ... including simplifying operations in product creation in its Symbian smartphones organisation.”

The iPhone has set the standard for smartphones for many design-conscious consumers, while BlackBerrys have been the favourite of the corporate set. More recently, Google Inc’s Android software has emerged as the choice for phone makers that want to challenge the iPhone.

Nokia’s Symbian operating system is older than Apple’s software and wasn’t designed from the ground up for touchscreen phones. Other manufacturers that used Symbian have mainly jumped ship to Android.

Elop, a Canadian who took over on Sept 10 from veteran Olli-Pekka Kallasvuo, is the first non-Finn to run the company.

The choice of a North American executive was largely seen as reflecting the increasing dominance of US and Canadian companies in the evolution of the top end mobile phone business.

Nokia, once the bellwether of the device business, has disappointed markets that had expected something fresh and new from a company that once had the innovative edge.

Although Nokia last month unveiled its new flagship touchscreen N8 model, which has been generally well received, it was too late for the third quarter and the company has pinned its hopes on the last quarter for a pickup.

But it warned that it expects lower device sales in the fourth quarter, of between 8.2bil and 8.7bil euro (RM40bil and RM43bil).

Nokia also slightly revised up previous estimates saying that it now expects the global device market to grow more than 10% this year but cautioned 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,” Elop said.

“We will make both the strategic and operational improvements necessary to ensure that we continue to delight our customers and deliver superior financial results to our shareholders.”

Nokia sold 110.4 million devices in the period, up 2% on the same period last year. — AP

++++ http://nokia.com

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3

Next In Tech News

German watchdog bans Facebook from processing WhatsApp data
Exclusive - Waymo, Cruise seek permits to charge for self-driving car rides in San Francisco
EA signals gaming boom extending run with upbeat annual forecast
FCC studying impact on chips shortage on U.S. communications sector
Judge in U.S. case against Facebook delays trial preparation
U.S. senator asks firms about sales of hard disk drives to Huawei
Ubisoft invests in free-to-play games, signals profits might fall
YouTube to launch $100 million creator fund for Shorts video feature
EBay taps into NFT frenzy, allows sale on platform
Tech selloff in focus as Nasdaq backs further away from record highs

Stories You'll Enjoy