Nokia Cuts 10,000 Jobs by 2013 To Save Overall Costs of Company

Nokia CEO Stephen Elop (L) speaks during the company's news conference in Espoo, June 14, 2012.(Photo : Reuters)

By Zanub Saeed

Nokia announced on Thursday that it will be laying off 10,000 jobs around the globe by the end of 2013, as a means to save more costs for the overall company, said the Associated Press.

The cellular phone company will shut down development projects in countries like Germany and Canada, as well as its manufacturing plant in its home nation of Finland, said the AP in a report released on Thursday. The company states that due to competition from the more-popular smartphone brands like Apple's iPhone and Google's Android, with phones made from Samsung and HTC, it was losing business.

Like Us on Facebook Follow @franchiseherald

In 2011, Nokia came in third place in terms of how many smartphones it sold, where consumers purchased 12 units worldwide, compared to Samsung's 44.5 million and Apples' 35 million, the Associated Press noted. The company also felt a net loss of €1.07 billion in the last quarter of 2011, as compared to the €745 million profit it made in 2010.

"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 CEO Stephen Elop told the Associated Press. "We are increasing our focus on the products and services that our consumers value most while continuing to invest in the innovation that has always defined Nokia. However, we must re-shape our operating model and ensure that we create a structure that can support our competitive ambitions."

Nokia products are sold in the United States in a variety of markets like Walmart, Best Buy, and other major electronics retailers. Nokia noted that it plans "to significantly reduce its operating expenses," they told the Associated Press, and will put more focus on upgrading their smartphones, and cheaper feature phones, as well as expanding location-based services, they told the AP.

"Nokia is significantly increasing its cost reduction target for devices and services in support of the streamlined strategy announced today," CFO Timo Ihamuotila explained to the Associated Press. "With these planned actions, we believe our devices (and) services business has a clear path to profitability. Nokia intends to maintain its strong financial position while proceeding aggressively with actions aimed at creating shareholder value."