Nokia (NYSE:NOK) will cut 3,500 jobs as part of another reorganization of its business as the world's largest handset maker continues its transition to using Microsoft's (NASDAQ:MSFT) Windows Phone platform. Nokia also said that along with Siemens it will invest around $1.36 billion in their infrastructure joint venture Nokia Siemens Networks.
Nokia said it will close a plant in Cluj, Romania, that produces feature phones. The plant was only opened in 2008 but will be shuttered by year-end and the closure will affect 2,200 jobs, Nokia said. The company said it wants to focus its feature phone manufacturing on locations closest to suppliers and customers and that its high-volume Asian facilities suit its needs better. Nokia said it will evaluate its operations at other plants to make them more customized for specific markets, and said it could cut more jobs in the first quarter of 2012. Nokia has said it will cut $1.46 billion in operating expenses from its devices and services business for 2013, compared with 2010 levels.
In addition to the plant closure, Nokia said it will reorganize its mapping business, now called Location & Commerce, and will cut 1,300 jobs as part of those changes, which involve consolidating development efforts in Berlin, Boston, Chicago and other sites. All of the new job cuts are in addition to the 4,000 Nokia announced in April and are expected to take effect by the end of 2012.
Meanwhile, the Wall Street Journal reported that Nokia is developing a Linux-based operating system code-named Meltem for its low-end phones. The report, citing unnamed sources, said that Mary McDowell, Nokia's executive vice president in charge of mobile phones, is leading the effort. The focus is to improve Nokia's competitiveness in emerging markets, the report said, which also noted that Nokia has begun releasing dual-SIM phones in those markets. Nokia declined to comment, according to the Journal.
Nokia also announced both it and Siemens will contribute a combined $1.36 billion investment to Nokia Siemens, and named Jesper Ovesen as executive chairman of the board. Former Nokia CEO Olli-Pekka Kallasvuo, who had served as non-executive chairman, stepped down from his role. Ovesen served as CFO of Danish telecommunications group TDC during the company's restructuring and initial public offering.
In exchange for the investment, Nokia and Siemens will get preferred stock in Nokia Siemens. While Nokia spokesman James Etheridge told Dow Jones Newswires that an IPO for Nokia Siemens is a possibility in the future, Nokia and Siemens representatives said the company is focused on improving operationally and financially. Nokia and Siemens said in July that they were abandoning talks with private-equity firms to buy a stake in NSN.
For more:
- see this Nokia job cuts release
- see this NSN release
- see this Bloomberg article
- see this Dow Jones Newswires article
- see this WSJ article (sub. req.)
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