Despite strong 3Q results, Nokia slashes 1,800 jobs
22 Oct 2010
Despite posting third quarter sales of €10.3 billion and profit of €322 million ($447.6 million), Nokia, yesterday said that it would cut 1,800 jobs worldwide as the world's largest mobile handset maker plans to streamline some of its divisions.
The job cuts comes despite the Espoo, Finland-based Nokia logged €322 million profit in the third quarter ended September, after a disastrous €913-million loss in the same quarter the previous year due to massive impairment charges.
The job cuts, which represent about 3 per cent of the company's core workforce, will be at its Symbian Smartphones business and its Services organisation.
The cuts also come at a time when Nokia's newly appointed CEO Stephen Elop is devising plans to raise the company's market share in the smart phones segment, which has taken a beating from rivals like Apple, Research In Motion, HTC, Motorola and Samsung.
Nokia said that it plans to renew product creation at its Symbian Smartphones division, to increase responsiveness to consumer demands and reduce time to market to increase competitiveness and support building an attractive and sustainable platform for application developers.
Nokia is also making changes in its services organisation by focusing on delivering an integrated Ovi experience across its full range of devices and in line with these changes, Nokia is also streamlining certain corporate functions and corporate research activities.
Nokia's Symbian operating system and its software development and web services business are the key divisions that can keep its position as world leader in mobile handsets.
But both these divisions have allowed its rivals to play catch up in innovation, which led analysts to speculate that the Finnish company may stop investing in its Symbian operating system and opt for systems developed by Microsoft or Google, which makes the Android operating system.
Nokia said that it intends to boost the agility and responsiveness of its software development and Web services divisions, which have been lagging behind Apple, Google and others in innovation.
Apple's App Store is far ahead of Nokia's Ovi Store with at least 300,000 third-party applications officially available on the App Store and with over 7 billion downloads, while the Ovi Store has a few thousand applications and one million downloads a day - or roughly 30 million per month.
While comparing, Apple's App Store went from 2 to 3 billion downloads in just three months or more than ten times the amount of apps per month than the Ovi Store although Apple does not have the number of customers that Nokia has.
