Nokia Shakes Up Executive Ranks, Will Eliminate 10,000 Jobs by the End of 2013
June 14, 2012 3:17 AM
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(Source: Paramount Pictures)
All is not well in Nokia Land
Nokia seems to be
riding high in the U.S. with its Lumia 900 smartphone
that runs Microsoft's Windows Phone 7.5 operating system. The company is seeing high demand for its flagship smartphone on AT&T's wireless network and is reportedly in talks with Verizon to expand its market presence in the U.S.
all is not well with Nokia globally
. The company's overall smartphone market share has plunged worldwide
with the most recent figures from IDC
showing that Nokia had just 8.2 percent global smartphone market share for Q1 2012 compared to 24.7% and 29.1% for Apple and Samsung respectively.
Nokia Lumia 900
As a result of its precarious place in the worldwide phone market, Nokia is looking to make some drastic changes to put out the flames on this burning ship. Today, Nokia announced a plan of action that centers around three key goals:
Invest strongly in products and experiences that make Lumia smartphones stand out and available to more consumers;
Invest in location-based services as an area of competitive differentiation for Nokia products and extend its location-based platform to new industries; and
Improve the competitiveness and profitability of its feature phone business.
In an effort to follow through this plan, Nokia looking to its
Lumia brand of smartphones
to showcase its innovative side and reclaim market share back from industry heavyweights like Samsung and Apple. "We intend to pursue an even more focused effort on Lumia, continued innovation around our feature phones, while placing increased emphasis on our location-based services," said Stephen Elop, Nokia president and CEO. "However, we must re-shape our operating model and ensure that we create a structure that can support our competitive ambitions."
Nokia CEO Stephen Elop
Nokia is also shaking up its executive team. Effective July 1, 2012, Juha Putkiranta will become executive vice president of Operations; Timo Toikkanen will take over as executive vice president of Mobile Phones; Chris Weber will service as executive vice president of Sales and Marketing; Tuula Rytila will claim a position as senior vice president of Marketing and Chief Marketing Officer; and Susan Sheehan assume the role as senior vice president of Communications.
Executives on the way out the door effective June 30, 2012 include Jerri Devard (chief marketing officer), Mary McDowell (executive vice president of Mobile Phones), and Niklas Savander (executive vice president of Markets).
Perhaps the most drastic change, however, is Nokia's decision to eliminate 10,000 employees worldwide by the end of 2013. These job losses will come as a result of the closure of Nokia facilities in Finland, Germany, and Canada along with the streamlining of its corporate, IT, and support functions.
"These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia's long-term competitive strength," added Elop. "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."
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RE: Big mistake
6/14/2012 12:25:46 PM
Nokia was a sinking ship already and needed a hail mary and a quick win. Their OS was not going to be viable in the long run and they could read the writing on the wall when many of the Symbian partners (Samsung, Sony, LG) withdrew and switched to Android. Given the situation, I don't think they had a lot of choices.
As they had dedicated their resources into their own OS, they had to re-design their devices around a platform they didn't have experience with. I'm 100% positive they would've approached Google first because of the marketshare.
Unfortunately, Google is well known for not providing much support beyond providing the core OS which is why each vendor, along with each carrier is responsible for their own customization and updates. Had Nokia went with Google, they'd be engineering it themselves, at their own cost, and probably still be working on releasing their first Android phone to the market.
On the other hand, Microsoft will throw money and bodies at you to get what you want if they can see a good ROI from it. Which is exactly what they did. Nokia needed a cash infusion to re-platform and they got it from Microsoft (likely thanks to Elop's relationship with Microsoft).
I have my doubts whether Nokia will succeed. I think like RIM, they clung onto something that was had became out of step with the market for much longer than they should've. WP is their hail mary - however it may have been too late for them.
"If you look at the last five years, if you look at what major innovations have occurred in computing technology, every single one of them came from AMD. Not a single innovation came from Intel." -- AMD CEO Hector Ruiz in 2007
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