CEO Stephen Elop's plan to return Nokia to healthy profitability takes another step forward today with a further 3,500 cuts to its global payroll. Unlike the staff reductions announced in April targeting its R&D operations related to mobile phones and devices, this new round of cuts are directed at Nokia's manufacturing and operations. To meet its goals, Nokia will close its Cluj factory in Romania, affecting 2,200 employees, while shedding an additional 1,300 jobs from its Location & Commerce business. Nokia is also reviewing the long-term effectiveness of its manufacturing operations in Salo, Finland, Komarom, Hungary, and Reynosa, Mexico, hinting at future headcount reductions as the sites gradually shift their focus to customer and market-specific software and sales package customization.
In defense of the announcements, Stephen Elop said, "We must take painful, yet necessary, steps to align our workforce and operations with our path forward." The Canadian-born CEO and former Microsoft exec added, "We are seeing solid progress against our strategy, and with these planned changes we will emerge as a more dynamic, nimble and efficient challenger." The fact that he sees Nokia as a "challenger" -- not "leader" -- shows just how far the once mighty company has fallen.