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Nokia To Cut 10,000 Jobs and Close 3 Facilities 350

Posted by timothy
from the role-of-management-is-to-suck dept.
parallel_prankster writes "NY Times reports that Nokia said on Thursday it would slash 10,000 jobs, or 19 percent of its work force, by the end of 2013 as part of an emergency overhaul that includes closing research centers and a factory in Germany, Canada and Finland, and the departures of three senior executives. The company also warned investors its loss was likely to be greater in the second quarter, which ends June 30, than it was in the first, and that the negative effects of its transition to a Windows-based smartphone business would continue into the third quarter. Nokia, based in Espoo, Finland, posted a loss of €929 million, or $1.2 billion, in the first quarter as sales plummeted 29 percent. Once the undisputed global leader in the mobile phone business, Nokia has been outcompeted by Apple, as well as by Samsung and other makers of handsets running Google's Android operating system." (Here's another source, if you're hit by the NYT paywall, and the company's own positive spin.)
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Nokia To Cut 10,000 Jobs and Close 3 Facilities

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  • by crazyjj (2598719) * on Thursday June 14, 2012 @09:30AM (#40321703)

    A lot of Apple fans and MS haters may be tempted to cheer, but the loss of 10,000 jobs in this economy means 10,000 families whose lives will been up-ended and that sucks no matter what phone you're rooting for.

    And what's more, according to the article, a third of these job losses will come from Finland, with more in Germany and Canada. Decent western factory jobs seem to be going the way of the Dodo bird. Are there any phones still actually being manufactured in the first world? Even if Nokia recovers, what are the odds that those jobs won't reappear in Finland, but in China?

    • by Nursie (632944) on Thursday June 14, 2012 @09:39AM (#40321793)

      Cheer?

      I can hate on MS as much as the next guy, but this is sad whatever way you spin it. Nokia used to create great products and be a byword for quality, reliable, cutting edge phones.
      Then they lost their way, management started all sorts of retarded internal competition games and the company just started chucking out hundreds of near identical handsets.

      Even then they had a significant market lead, even in the smartphone sphere, but they were losing it. This is when Elop came along and really killed them, jumping straight into bed with his old bosses and sealing the fate of a once-great european tech powerhouse.

      It's a shame to see such an icon driven into the ground.

      • by Nursie (632944) on Thursday June 14, 2012 @09:41AM (#40321825)

        I should add that it's also entirely obvious that this would happen since the MS deal.

        • by plover (150551) * on Thursday June 14, 2012 @09:55AM (#40321997) Homepage Journal

          It may have been obvious, but it was obvious long before Microsoft had anything to do with it, and this certainly isn't Microsoft's fault. Remember the Burning Memo? Nokia has been faltering ever since the Chinese factories have been able to create their own lines because of the cell phone chipset availability.

          Nokia took the Microsoft deal because it became evident to them that Nokia's own OS was no longer a selling point, so it didn't make sense to further invest in it. That saved them a few kroner in the short term, plus there was a longshot chance that Windows Phone 8 could have made a dent in the market. It obviously hasn't yet, nor did the tech community expect much different, but one never knows what the phone market will look like in five years.

          • by Anonymous Coward on Thursday June 14, 2012 @10:17AM (#40322253)

            They could easily choose a different strategy and save the company. E.g. they could become OS-agnostic, just like Samsung: produce N9-like phone in both Maemo, Android and WP7 version, and see what sells best. I'm 100% sure lots of people would buy Android version of this phone because of the great looks and mature OS.
            Killing Symbian too early, killing Maemo right after it was finally ready to sell and going to WP7 only was the most stupid decision ever.

            I hope they eventually going to realize it and give that infiltrator from Microsoft the treatment he deserves.

            • by Tough Love (215404) on Thursday June 14, 2012 @12:40PM (#40323881)

              They could easily choose a different strategy and save the company.

              Fire Elop and sue Microsoft?

            • by plover (150551) * on Thursday June 14, 2012 @12:50PM (#40324007) Homepage Journal

              They could go Android, sure, but Android phones are almost commodity phones, where the handset manufacturer isn't adding enough value to make them differentiators. That means as a customer, I could pick up an LG or HTC or Motorola or Samsung and get a pretty similar phone. And that means they all compete on price. That puts the Nokia phones up against the manufacturing might of China, which means that margins would start out razor thin and fade quickly to non-existent.

              Symbian appealed to a hundred thousand early-adopter phone geeks, but they were not getting any mass market share from the first-time smartphone buyers, who were heading straight to Android or iPhone (depending primarily on the contents of their wallets.) Maemo would have cannibalized that market, but would not have taken any buyers away from the two big players. The WP7 deal came with the backing of Microsoft, which provided a lot more marketing clout than Nokia is capable of delivering these days.

              When you're trying to compete, it's best to have a differentiator that people will actually pay for. Symbian was no longer it, and Maemo would never have been it. They bet that WP7 might have been it. It's not looking great so far, but Microsoft is a lot better backed than anyone else courting Nokia.

              • by s73v3r (963317) <s73v3r@noSPAM.gmail.com> on Thursday June 14, 2012 @12:56PM (#40324093)

                They could go Android, sure, but Android phones are almost commodity phones, where the handset manufacturer isn't adding enough value to make them differentiators.

                You know, everyone says this, and while I'm not going to argue it's not true, I will point out that Android phones are actually selling, as opposed to Windows Phones. A differentiator only matters if it can actually sell.

          • by symbolset (646467) * on Thursday June 14, 2012 @10:47AM (#40322601) Homepage Journal

            The iPhone proved a hugely popular choice and the smartphone started to boom. Established players Palm, Nokia, RIM, Motorola Mobility, Samsung, HTC and LG faced a difficult choice as they clearly needed a new winner. Palm made the wrong choice to go their own way and imploded. Nokia went their own way and suffered but survived on momentum. RIM continued to go their own way, confident their customers were committed due to the nature of their offering. When Windows phone came out, almost all the survivors hedged their bets with it but RIM persisted in continuing to go their own way and imploded. When Windows Phone proved an unpopular choice most of the survivors kept it as a hedge but emphasized their alternative, but for some reason [semiaccurate.com] Nokia bet the farm on it and imploded.

            - History of Smartphone Economics, 2009-2012.

            "If you bet the farm often enough eventually you win a factory job."

            - Anonymous

        • by TheRaven64 (641858) on Thursday June 14, 2012 @10:08AM (#40322137) Journal

          The MS deal didn't really have anything to do with it. Nokia lost its way almost a decade ago. They flailed around trying a large number of incompatible things, with no overall direction. The Symbian kernel rewrite was probably the last good thing they did and they failed to couple it with a decent userland, so Symbian programmers were still stuck with APIs that were designed for systems with under 4MB of RAM. They made a few half-hearted attempts at moving to Linux (ignoring the fact that they already had a decent kernel, it was their userland that was the problem), and then seemed to completely lose the plot.

          The MS deal was just another failure to fix the situation, in a long line of similar failures. It wasn't the cause, just another failed attempt at recovery.

          • by oh_my_080980980 (773867) on Thursday June 14, 2012 @10:13AM (#40322195)
            Think again. Investors punished Nokia after the announcement of the Microsoft deal. Their stock took a massive hit. Then it took them ONE YEAR to bring a Windows phone to market and in the meantime they killed off their Symbian product.

            All this was in direct relation to the Microsoft deal.
          • by Anonymous Coward

            mostly agree. My view from within (it's my last day tomorrow) is that the real thrashing only started 5 years ago. Changing gui framework repeatedly decimated developer interest each time. There basically was no 'platform'. I foretold this final outcome on feb11as did many others. Elop was certainly the person who put nokia on the directed downward spiral. The whole board is responsible, of course.
            Fatphil, posting AC only as i' not at my desktop with memoised passwords, i'm on a boat to finland to return

          • by Tough Love (215404) on Thursday June 14, 2012 @12:44PM (#40323935)

            The MS deal didn't really have anything to do with it

            Oh which planet? Note: NOK dropped 20% the day the Microsoft sellout was announced. Burning platforms indeed.

      • Nokia has been taking a hard hit, mostly because of its management. But the bad economic climate in the world, specially in Europe, is not helping any european company.
        • by Luckyo (1726890)

          Actually it's helping companies massively. On one hand, weakening euro means easier exports (since they can't do what US did and just inflate currency to help exports due to ECB). On the other hand worsening economic climate means employer's market where employees have to give more and more to employer for less returns.

      • by Penguinisto (415985) on Thursday June 14, 2012 @10:41AM (#40322527) Journal

        They brought it on themselves, and have only themselves to blame.

        In all seriousness, Nokia sat around on its ass all smug and secure for way too long after the iPhone detonated, then redefined the market. Samsung, HTC, and many others busted ass to remake themselves and their products into credible contenders. Nokia sat around and watched their R&D flounder around, thinking they had all the time in the world to do something about it, all while pointing at Symbian's (then) massive dominance of the global smartphone markets. They then had a chance to make a clean break and start fresh, but they decided to back the wrong horse (with a nudge from their new Microsoftie CEO, natch).

        Moral of the story? Apparently it's two-fold:
        1) If you're on top, don't sit around on your ass all complacent about it.
        2) Never hire anyone who has previously worked as a Microsoft executive. They *will* fuck you over.

      • by Wansu (846) on Thursday June 14, 2012 @11:59AM (#40323455)

          Then they lost their way, management started all sorts of retarded internal competition games ...

        Bad management is why most of the high paying jobs have disappeared over the last several decades, due either to incompetence, crookedness or a combination of the two. Nokia is just the latest in a long line of mismanaged companies going belly up.

    • by nurb432 (527695)

      Why would a fan wish for (fair) competition to go away in the first place? You may not want what they are offering, but its what keeps your side moving forward too.

    • by IAmR007 (2539972) on Thursday June 14, 2012 @09:49AM (#40321925)
      Windows phones was definitely the wrong way to go. Getting Qt working well on Android and iOS and marketing it as a platform could have been a lot more successful. Being able to use the same core code on multiple platforms is a big advantage. Instead, they chose a dying mobile OS.
      • by Tough Love (215404) on Thursday June 14, 2012 @12:56PM (#40324089)

        Getting Qt working well on Android and iOS and marketing it as a platform could have been a lot more successful.

        They can still do that if they fire Elop. And they can start with vanilla Android to tide them over through the QA period. Getting QT up on Android would take what? Two weeks for somebody who knows what they're doing?

    • by alen (225700)

      assembling a phone is the equivalent of playing with Lego's. its simple tedious work. why would i want my kids to aspire to this kind of work?

      the value is in owning and developing the OS, battery tech, screen tech, the communications standards as well as all the other IP and semiconductors that go into the phone. assembly is monkey work

      • Because not everybody's kids have the ability do those kind of things. You need a complete economic scale of jobs to acheive resonably full employement. If everybody in the world developed battery tech and communication standards, there'd be nothing to eat, no roads to drive on, nowhere to buy stuff. As they say, "The World Needs Ditch Diggers, too..."
      • by Plammox (717738)
        Assembly techology development is closely linked to the rest of the design, be it casing, antenna, battery and display. Make no mistake, assembly and assembly development (normally co-located on the same site) is no monkey work. And our far-eastern friends in China, Malaysia, Taiwan, etc. are excelling at this. At a low price, even.
      • by crazyjj (2598719) * on Thursday June 14, 2012 @10:10AM (#40322153)

        why would i want my kids to aspire to this kind of work?

        If you went to public school, remember all the "slow" kids, and all the others who clearly weren't cut out for college? Well, those kids are adults now and they need jobs just like you do.

      • by Asic Eng (193332) on Thursday June 14, 2012 @10:16AM (#40322243)

        assembling a phone is the equivalent of playing with Lego's. its simple tedious work. why would i want my kids to aspire to this kind of work?

        They are not just closing plants according to this [bloomberg.com].

        From the bloomberg article: "The biggest share of cuts will come in research and development, where Nokia is killing whole projects to preserve others that are more important, Chief Financial Officer Timo Ihamuotila said on a call. Sales is the second-biggest area affected and general overhead is third, he said."

        So they are now at the stage where they have to stop developing tomorrow's products in order to pay today's bills.

    • by Mr0bvious (968303)

      Really? I'm no economist but I don't think these jobs are lost, the moved elsewhere surely?

      I'd be willing to bet that the vast majority of those jobs were lost/moved to Samsung, and I'm pretty sure Samsung products are not primarily made in China. Though I could be wrong, but I thought Samsung manufacture a lot of their products in Vietnam and Taiwan. Not that this makes any difference.

      Don't get me wrong, I really hope the rest of the world can regain some manufacturing capability from those who have the st

    • by Bigby (659157)

      There have already been 20k+ jobs gained by competitors at the expense of Nokia. So while 20k families have been helped. I say less than 10k, because there has to be husband/wife or parent/child employed there somewhere.

      Net gain for society (but likely not Finland).

    • by bug1 (96678)

      Its pretty empty headed to show sympathy for the symptoms if you ignore the cause.

      Every man and their dog told them that MS wasnt going to save them, but they took the money.

    • by drkstr1 (2072368)

      A lot of Apple fans and MS haters may be tempted to cheer, but the loss of 10,000 jobs in this economy means 10,000 families whose lives will been up-ended and that sucks no matter what phone you're rooting for.

      And what's more, according to the article, a third of these job losses will come from Finland, with more in Germany and Canada. Decent western factory jobs seem to be going the way of the Dodo bird. Are there any phones still actually being manufactured in the first world? Even if Nokia recovers, what are the odds that those jobs won't reappear in Finland, but in China?

      I don't think many people here will be cheering for this one. Nokia has always (well until recently) been near and dear to many techies hearts.

      I still have fond memories of setting up my own land-line dial up server so I could connect to the Internet with the analog modem in my Nokia 9290. Their platform was very open, and seemed to encourage curios tinkering. For normal consumers, their products were well built, user friendly, and always ahead of their time. Nokia's failing was not their technology, but ra

  • by White Flame (1074973) on Thursday June 14, 2012 @09:34AM (#40321743)

    Whaaaaat?!?! Really? This is a tremendously unexpected turn of events that nobody outside of your boardroom dealings would have EVER suspected!

  • by arcite (661011)
    Microsoft should do a 2 for 1 purchase of Nokia and Rim, then finally they'll be able to make a superior phone that is constructed tough as nails while also having a solid keyboard and touchscreen.
    • Re:Idea (Score:4, Interesting)

      by h4rr4r (612664) on Thursday June 14, 2012 @09:50AM (#40321937)

      Would not happen. Instead they would buy the companies fire all the workers and replace them with MS party line type folks. You would get a phone that RRoD would be a known issue for years, and would be worse than any the two previous companies made before. NIH is a huge issue for MS.

      • by firex726 (1188453)

        I can see it now...

        They would replace Mgmt with "Yes Men", and a year later release the ZunePhone, Poop Brown and Pea Green color scheme.

    • by Asic Eng (193332)

      What's the point? The Lumia is a decent mid-range device, Nokia still has enough manufacturing capacity to make more of them - what they are lacking is customers.

      MS buying Nokia would be nice for Nokia shareholders, but given that the company is already making Windows phones, there would be no gain for MS.

  • by GhostIdentity (2600469) on Thursday June 14, 2012 @09:38AM (#40321789)
    Stephen Elop - The Trojan Horse of modern era.
  • by Anonymous Coward on Thursday June 14, 2012 @09:39AM (#40321797)

    Meanwhile, Microsoft, Apple, Samsung, and Google IP lawyers are circling to fight over the carcass (Patent Portfolio) of Nokia.

  • by nurb432 (527695) on Thursday June 14, 2012 @09:41AM (#40321833) Homepage Journal

    Pretty simple math. No matter how big you are, if you cant keep up with changing times, you go away.

    • by DingerX (847589)
      Ironically, this was the logic behind Elop's notorious Burning Platforms [engadget.com] memo that justified junking Symbian, MeeGo, and any homegrown smartphone work (which as profitable) in favor of Windows Phone. "Adapt or Die" sounds good, but in this case it was used to adapt the bathwater for Microsoft's baby.
  • A sad day... (Score:4, Interesting)

    by christianT (604736) on Thursday June 14, 2012 @09:41AM (#40321835)

    It's a shame to see Nokia falling apart. It was not long ago that they had the very promising n900. I was all ready to buy one of those until I found out that it wasn't available on my carrier of choice, and in fact the only carriers it was available on in my area were the ones with the poorest coverage.

  • by fortfive (1582005) on Thursday June 14, 2012 @09:43AM (#40321851)

    a factory in Germany, Canada and Finland

    That's some factory--Nokia must have invented some kind of trans-dimensional technology. Surely that's worth a few bucks to someone?

  • by Anonymous Coward on Thursday June 14, 2012 @09:46AM (#40321889)

    Nokia was working on another Linux based operating system. This is now stopped [maemo.org].

    More insight into how the board of Nokia is being stacked with Microsoft cronies [blogs.com].

  • by Eponymous Coward (6097) on Thursday June 14, 2012 @09:49AM (#40321923)

    Another round or two like this and the company will be all executives, no workers. That should help get them going in the right direction.

    • by game kid (805301)

      Someday, when my soul and will are fully broken by the business world and I become an exec, I too shall use that "sharpen strategy" line from the press release...

      Me
      "Good news Jim-Bob, we're about to sharpen our strategy!"
      Jim-Bob
      "Yay! So, duhhhh, I'll be having a longer schedule in the project?"
      Me
      "No, Jim-Bob, you'll have no hours in the project. We'll just get some guys from China when we need help. Bwa hahaha hah!" *continues evil laugh for 4 minutes*
  • Typical (Score:5, Insightful)

    by JustAnotherIdiot (1980292) on Thursday June 14, 2012 @09:50AM (#40321939)
    CEO and board members make a bad decision, the workers at the bottom end up paying for it.
    Best of luck to those being let go.
  • by bmo (77928)

    This is what the aircraft safety people call "controlled flight into terrain" when one flies a plane into the ground.

    Elop is one hell of a pilot.

    --
    BMO

  • When Apple first announced the iPhone, Jobs said in an interview that he would be happy if the iPhone captured 3% of the global smartphone market. Mind you, at the time, the Blackberry and the Treo were pretty much the only smartphones that existed.

    Nokia was at the time, the biggest provider of any type phones and Apple believed that they had no chance to compete in that market, especially since Nokia was making phones that cost a mere $20 after being subsidized by the carrier.

    So, how did Apple, which start

    • How? By doing what they've done for 30 years - making hardware and software actually work together without massive end-user hassle. They don't invent ground breaking technologies (for the most part, there have been a few exceptions), but they make available technologies actually useable.

      Turns out that there's a shedload of money in doing that.

      • by firex726 (1188453)

        Yea, Apple is great at integrating existing technology and marketing.

        Before them, no one really gave a shit about a phone's OS, it was clunky and unwieldy which was to be expected.

    • I believe it's because they built a phone for consumers rather than for carriers.

  • by tuffy (10202) on Thursday June 14, 2012 @10:08AM (#40322129) Homepage Journal
    I've found Tomi's ongoing saga of Nokia's downfall [blogs.com] to be quite interesting. A choice quote about today's news:

    The worse news is the guidance about Q2 profit warning and Q3 smartphone sales problems, that was hidden in the story about layoffs. So before, in Nokia's profit warning, Nokia said it will have problems with the handset unit profitability (producing a loss) in both Q1 and Q2. The losses for handsets in Q2 were supposed to be similar to Q1 ie -3%. Now we hear that Q2 losses will be bigger than 3%. This is VERY BAD NEWS. It really means that Nokia is falling into the hole and the rate of the fall is only increasing.

    The gist of it being that Windows isn't working, and Elop is killing any possible "plan B" for the company.

    • by tpheiska (1145505) on Thursday June 14, 2012 @10:18AM (#40322263)

      Mod parent up. The blog in question is awesome. For example this [blogs.com]:
        "Before the Burning Platforms memo, in 2010 Nokia towered over its rivals like very few companies have ever managed in a Fortune 500 size scale. Nokia's smartphones sold more than 2x those of the iPhone and more than 3x as many as Samsung. Today only 18 months later, Nokia is a third the size of the iPhone and one quarter the size of Samsung's smartphones. Never, ever, in any industry, has a global market leader collapsed this comprehensively. This is a world record in destruction of a market leader. Understand what that means. Elop has set a world record in management failure. He is a world record holder in the most incompetent CEO that has ever been. Not just the worst CEO now, but of all time - that is what 'world record' means - and this collapse of Nokia is BY A WIDE MARGIN the biggest collapse of a global Fortune 500 sized company, who was the market leader in its own industry. I have been asking my readers to come up with any example of such total collapse in 12 months in economic history - never been done. Never. This is the worst management failure of all time! And it was not caused by a tsunami or earthquake or national revolution or exploding factory. It was caused by Stephen Elop. He started the destruction on a February day in Espoo when he released his Burning Platforms memo. "

      • by Hatta (162192)

        This is a world record in destruction of a market leader. Understand what that means. Elop has set a world record in management failure.

        This assumes that destruction of Nokia wasn't Elop's goal to begin with. It's hard to look at the facts and come away with that impression.

      • by Tough Love (215404) on Thursday June 14, 2012 @01:03PM (#40324193)

        Elop has set a world record in management failure.

        Management failure? How about criminal malfeasance.

  • And then screw it up unto death, like everything else.

  • by JDG1980 (2438906) on Thursday June 14, 2012 @10:55AM (#40322677)
    Stephen Elop's decisions as Nokia CEO indicate that he is placing the well-being of another company (Microsoft) over the well-being of the company he's supposed to represent. The result is the $1.2 billion quarterly loss mentioned in the original post. This loss is, in large part, a result of Elop's breach of his fiduciary duty to Nokia. Why haven't the shareholders sued him?
    • You don't know what his contract says. If it says in the small print "Get Microsoft to buy all our shares" and the idiots didn't think of the best way to do that (make them worthless) then they have nothing to sue about. A lot of bonkers management decisions make perfect sense - if you know what they were contracted to do.
  • by papasui (567265) on Thursday June 14, 2012 @12:49PM (#40323987) Homepage
    I have been thinking this entire thing smells like Elops entire goal was to drive stock so low that Microsoft can buyout Nokia on the cheap and have their own cell phone manufacturing division, ala Apple and now Google.

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