Nokia Corporation (NYSE:NOK) knows they are struggling in the market of technology and smartphones, this is why they’re trying to revamp their operations by shutting down certain offices and expanding other offices in China.
The Wall Street Journal reports Nokia’s confirmation of their plans to shut down operations in Shanghai and Chendu, while further expanding other operations in Bejing and Guangzhou. A long time ago, Nokia used to hold a big presence in the China market but now they have fallen behind there and everywhere else. Nokia needs to regain a prominent presence in China and that’s exactly what they appear to be doing.
Back in April Stephen Elop, chief executive officer for Nokia, discussed the options in China. That was around the same time the company signed a new deal with China Telecom. He also promised to expand more carriers which would expand their footprint across the country.
During the first quarter, Nokia only sold 2 million Lumia smartphones. Apple Inc. (NASDAQ:AAPL) sold 35.1 million iPhones. Furthermore, Nokia’s handset shipments declined by twenty-four percent which allowed Samsung to take over the title as world’s biggest mobile phone maker.
While it’s great that Nokia is trying to make amends in their company and hopefully save it, the sad fact is there will be casualties in the form of job losses for many people. According to CNET, these cuts are just part of a big change that included 10,000 job cuts as well as the shuffle of the company’s management.
Nokia Corporation (NYSE:NOK)’s recent collaboration with Microsoft Corporation (NASDAQ:MSFT) has been anything but beneficial. The companies worked together to create a new Windows-based smartphone, the Nokia Lumia, but unfortunately the sales just were not quite what they had in mind. Although you can’t really blame Nokia for desperately wanting to try again, you have to question their whole game plan for designing and promoting the Lumia. The sad thing is I doubt halving the operations in China will save the company, I don’t think anything will. That said, it’s probably for the best interest of the company to shut down some operations but I’m not really sure how expanding operations in Bejing and Guangzhou will help the company. I’d imagine that it would be a better option to formulate a promising plan before expanding anything. In reality, the best option they should consider at this rate is to sell their company. Obviously, if they eventually take this route, it’s not going to be easy at first as nobody wants to buy a dying company but they might be able to get one company to save them before it’s too late.