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Nokia shakes up leadership, announces 10,000 job cuts, and lowers outlook

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Nokia announces 10,000 job cuts and company restructuring amid senior leadership changes.

Stephen Elop Nokia_1020
Stephen Elop Nokia_1020

Nokia announced today that it plans to shed 10,000 positions globally by the end of 2013, as a result of its plans to "rescale the company." Reductions in its Devices & Services division, along with the planned closure of facilities in Germany and Canada, will contribute to job losses. Nokia says it also plans to streamline its IT, corporate, and support functions, alongside a consolidation of manufacturing operations resulting in the closure of its manufacturing facility in Salo, Finland.

Alongside its restructuring efforts, the company also announced a number of changes to its senior leadership team. Nokia has appointed Juha Putkiranta as executive vice president of Operations; Timo Toikkanen as executive vice president of Mobile Phones; Chris Weber as executive vice president of Sales and Marketing; Tuula Rytila as senior vice president of Marketing and Chief Marketing Officer; and Susan Sheehan as senior vice president of Communications. Weber, Putkiranta, and Toikkanen will join the Nokia Leadership Team on July 1st, 2012. Jerri DeVard, Mary McDowell, and Niklas Savander will all step down from the Leadership Team effective June 30th, 2012. All three will continue in advisory roles while they transition their roles.

Alongside the sweeping changes, Nokia also lowered its outlook for its third quarter this year. Nokia says its Smart Devices business unit has been negatively affected by "competitive industry dynamics" to a "greater extent than previously expected." As a result, the company now expects its non-IFRS Devices & Services operating margin in the second quarter to be below its first quarter, and for the competitive industry to continue to negatively impact its Devices & Services division in the third quarter.

The changes are clearly huge for Nokia as it struggles to reduce costs amid the transition over to its Lumia range of Windows Phones. "These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia's long-term competitive strength," said Stephen Elop, Nokia CEO. "We do not make plans that may impact our employees lightly, and 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."