Helsinki/New Delhi, Jun 17: Finnish mobile handset maker Nokia on Thursday said it will cut 10,000 jobs globally by the end of 2013 but its Indian operations are unlikely to see any "significant impact".
Nokia also announced closure of its facilities in Ulm in Germany and Burnaby in Canada as part of its planned measures to rescale the company by making additional reductions in devices and services.
"Today's planned changes will impact Nokia employees throughout our operations globally. While we anticipate impact at other sites, we don't see significant impact on India operations. Having said that, we have no specifics to provide at this stage," a Nokia India spokesperson said.
As of March 31, 2012, Nokia employed 1,22,148 people. Of these, 68,595 were employed by Nokia Siemens Networks, a joint venture between Nokia and Siemens. The handset manufacturer in a statement stated that it will further consolidate manufacturing operations and close a facility in Salo, Finland. However, R&D development in Salo will continue.
"These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia's long-term competitive strength," Nokia president and CEO Stephen Elop said in the statement.
Along with the planned measures, Nokia also announced changes in senior management following the resignation of three officials, including Chief Marketing Officer Jerri DeVard.
Chris Weber, who was senior VP Markets for Americas at Nokia, has been appointed as Executive Vice President (EVP) of sales and marketing, while Tuula Rytila, senior VP of portfolio and business management, has been appointed as the CMO. Rytila will report to Weber.
The company announced the appointment of Juha Putkiranta as EVP Operations; Timo Toikkanen as EVP of Mobile Phones and Susan Sheehan as Senior Vice President of Communications. The new leadership team of Nokia will be in place from July 1, 2012, the statement said.
Elop said the company will provide support to those employees who are at risk of losing their jobs. "As a company we will work tirelessly to ensure that those at risk are offered the support, options and advice necessary to find new opportunities," Elop said.
Nokia said it will make reduction in portfolio related to non-core assets, including possible divestments. Taking into account these planned measures, Nokia now targets to reduce its devices and services' operating expenses to an annualised run rate of approximately 3 billion euro by the end of 2013.
"In addition to the already achieved annualised run rate saving of approximately 700 million euro at the end of first quarter 2012, the company targets to implement approximately 1.6 billion euro of additional cost reductions by the end of 2013," the company statement said.
In line with this, Nokia today announced plans to divest its luxury mobile phones business, Vertu to an European private equity firm EQT VI. The company said the cost reduction measures are designed to return its devices and services business to sustainable operating profitability as soon as possible.