Nokia HitsTough Times With Job Cuts
Nokia reported growing sales and profit for the third quarter. The company also announced a reorganization that will see 1,800 employees lose their jobs as the company tries to catch up with Apple's iPhone and Google's Android.
Sales for the quarter totalled €10.3 billion, up 5 percent compared to a year earlier, boosted by favourable exchange rates. Nokia reported net profit of €529 million for the quarter, up from a €559 million loss a year earlier.
The company sold 110.4 million phones, up 2 percent year on year, with an average selling price of €65, up from €64 a year earlier. Just like Sony Ericsson, Nokia complained about component shortages, which had a negative effect on the number of units it could ship.
The end of the third quarter was hectic for the Finnish phone maker: On September 10 it named former Microsoft executive Stephen Elop as its new Chief Executive Officer, replacing Olli-Pekka Kallasvuo, prompting Anssi Vanjoki, head of Nokia's Mobile Solutions division, to resign a few days later. Elop began work at Nokia on September 21.
To top that off, both Samsung and Sony Ericsson have recently abandoned the Symbian mobile phone operating system leaving Nokia as its sole backer and the head of Symbian Foundation, which is in charge of developing the operating system, resigned this week. Nokia has put the latest version of Symbian in some of its high-end smartphones, including the N8, which started shipping on the last day of September.
Symbian plays a key role in the reorganisation Nokia announced. The plans will simplify and speed up the way it creates new phones in its Symbian organisation, and are expected to result in a reduction of up to 1,800 jobs globally. Some of the job cuts will come from its services organisation and certain corporate functions, Nokia said.
The company will no longer refer to specific versions of the Symbian system, and will instead make constant improvements to the software in its products, including the N8, it said. Nokia will also use the Qt software platform to unify the development environment for Symbian and for MeeGo, the mobile OS it will use in its most advanced smartphones, the company said.
Competing in the high-end smartphone space with Apple's iPhone and with Android-based products has been Nokia's biggest problem for some time.
Still, the company sold 26.5 million smartphones during the third quarter, up 61 percent compared to the same period last year. The sales numbers were helped by the launch of a number of lower-priced smartphones, according to Carolina Milanesi, research vice president at Gartner.
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