Nokia Announces Another Round of Layoffs

About half the time you see Nokia in a headline these days, you have to wince a little. Just this year, the company laid off 7,000 workers in the wake of its decision to adopt Windows Phone 7 for its smartphones instead of its own Symbian OS, saw its market share drop precipitously, experienced a hack on its developer forum website, and just this week unveiled a phone whose OS is possibly DOA.

Today, Nokia announced that it’s slashing another 3,500 jobs within the next year or so in an effort to become more lean and mean. Officially, according to Nokia, the reasons are as follows:

“Nokia today announced plans to take additional actions to align its workforce and operations. The measures support both the execution of the company's strategy and the savings target the company announced earlier this year, and also target to bring efficiencies and speed to the organization.”

The cuts from earlier this year were aimed at consolidating its smart devices and mobile R&D teams (which doesn’t seem to be helping anything just yet), whereas this round of job cuts are in the areas of manufacturing, its Location & Commerce business, and “supporting functions”.

On the manufacturing side, Nokia is shutting down its Cluj, Romania facility and is evaluating three other facilities in Finland, Hungary, and Mexico. The latter three factories will likely remain in operation but with a shifting focus; even so, jobs will be lost. Combined, Nokia will slash about 2,200 jobs in manufacturing.

Nokia’s Location & Commerce business, which includes mapping and location-based services, is getting shuffled around. Operations in Bonn, Germany and Malvern, Pennsylvania, USA are closing their doors as the company focuses on developing its sites in Boston, Chicago, Berlin, and other locations. Due to the realignment, 1,300 employees will be laid off.

Regarding the job losses on the Location & Commerce side, Nokia resorted to the highest level of corporate-speak in the press release: “As part of consolidating this business, Nokia has identified potential synergies and opportunities to increase effectiveness through automation.” Wow.

Stephen Elop, President and CEO of Nokia Corporation

It’s difficult to tell if we’re seeing a once-great company in a death spiral or if this is just a fallow period that it will emerge from reorganized, rejuvenated, and ready to contend again with iOS and Android. Perhaps the Windows Phone 7 gamble will pay off, and maybe Nokia is the smartest company in the world for investing in low-cost Symbian phones for emerging markets, where there are billions of potential new customers. But it’s also possible that Nokia is becoming the Little Caesar’s of the smartphone world. Either way, for the time being it’s hard to watch.

Tags:  Nokia