Finnish mobile phone maker Nokia’s restructuring plan
Finnish mobile phone maker Nokia Oyj is cutting 10,000 more jobs and selling off its luxury handset unit Vertu, in a bid to keep the company alive in the face of a weakening market share and cash position.
Following is a summary of the company’s announcements on Thursday:
Plans to reduce up to 10,000 jobs globally by the end of 2013. The cuts will come from a wide range of segments including IT, corporate and support functions, and research and development. Cuts in research and development include closure of facilities in Ulm, Germany and Burnaby, Canada. The company will also close its plant in Salo, Finland, although research there is due to continue.
Aims to reduce its devices and services non-IFRS operating expenses to an annualized run rate of 3.0 billion euros ($3.8 billion) by the end of 2013.
Expects additional charges of around 1.0 billion euros related to restructuring activities in devices and services by the end of 2013. This is in addition to charges related to previously announced restructuring activities.
Sees restructuring-related cash outflows to be around 650 million euros in 2012 and 600 million in 2013.
Says industry competition more harsh than expected in the second quarter and expects that to continue through the third quarter.
Expects second-quarter non-IFRS operating margin to be below the negative 3.0 percent reported in the first quarter.
Plans to divest Vertu to EQT VI, a European private equity firm. The value of deal was not disclosed. Nokia will retain a 10 percent stake.
Plans to buy assets from Sweden-based Scalado, which specialises in mobile imaging technology.
Marketing chief Jerri DeVard, basic phone unit chief Mary McDowell and sales chief Niklas Savander to leave.
Juha Putkiranta will take over as head of operations, Timo Toikkanen as head of basic phone business, Chris Weber as head of sales, Tuula Rytila as chief of marketing and Susan Sheehan as chief of communications.
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