This morning in separate PR announcements, the embattled and beleaguered Nokia detailed its plans to cut 10,000 jobs across all facets of its workforce following dismal sales in the last three quarters as a result of the increasingly lackluster measures it has taken to transition away from its former platforms in Symbian and MeeGo to Windows Phone. The biggest sign of the failure of the current strategy is the following statement made bythe company regarding the difficulty of selling Windows Phone in measurable numbers compared to its previous volume when the company relied on a combination of Symbian and Series 40:
“The challenge is getting retail store employees interested in our products”
This statement flies in the face of rosy pictures painted by Elop and Nokia’s PR team regarding sales of the Lumia series and is despite undertaking millions of dollars in marketing in collaboration with Microsoft and carriers such as AT&T in order to extol the virtues of Windows Phone compared to the vastly more popular Android and iPhone. Store employees have received and are receiving additional training in devices and receiving additional bonuses for selling Windows Phone to customers over other devices, which culminated in the botched relaunch of the platform this past April, when Microsoft and AT&T selected Easter weekend to launch the Lumia 900, only to have the majority of stores either closed or limited to 1-2 devices with no way of fulfilling additional pre-orders.
To that end Nokia has been forced to adjust its guidance for revenue once again for the 2nd quarter following its equally dismal 1st quarter performance, this time with even lower projections for revenue, which means that the company will undertake the following strategy moving forward:
- Key long-term Nokia executives will be stepping down next month, among them chief marketing officer Jerri Devard, executive VP of mobile phones Mary McDowell and executive VP of markets Niklas Savander
- It will close factories in Finland, Germany and Canada which were previously dedicated to smartphone and feature phone production for S60/S^3 and Series 40 handsets
- R&D will also be significantly cut, with three dedicated offices being closed. No word yet on how the US campus in Irving, TX and the satellite office in the Dallas Telecom Corridor will be affected, as those two offices serve as the US headquarters for the conglomerate
- The luxury subsidiary Vertu has been sold to private equity group EQT VI for an undisclosed amount after years of mounting losses.
- Nokia will take a charge totaling $1.3 billion in 2013 in order to cover the cost of this restructuring with the complete earnings report being delivered to investors on the 19th of next month
- Nokia will focus on Series 30 and Series 40 handsets in developing markets in order to shore up marketshare in the increasingly competitive developing markets where it once enjoyed dominance before Chinese and Indian upstarts eroded its profit base
- Nokia will also focus on extending its in-house mapping technology across other industries outside of mobile
- Nokia will complete the majority purchase of Swedish imaging technology development partner Scalado, but will stop short of a complete purchase due to the firm having long-standing long-term agreements with HTC and Research in Motion
With the above strategy, Nokia is expecting to be able to correct its current course, though many are already predicting the end of the company in its current form and placing the blame squarely on Elop’s shoulders for the company’s current woes while others are predicting a quick sale to Microsoft in short order, being that Elop was a former Microsoft executive along with other key people working under him, such as Nokia USA president Chris Weber.
