Nokia Corporation (ADR) (NOK) Plans To Axe 440 Jobs After Losses

Nokia Corporation (ADR) (NOK) Plans To Axe 440 Jobs After Losses
Hermann / Pixabay

Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) continues to restructure itself and implement cost cutting measures in an effort to revive its profitability. The Finnish smartphone manufacturer plans to eliminate 440 jobs in its legacy mobile division after reporting losses for the second quarter of the current fiscal year.

Nokia Corporation (ADR) (NOK) Plans To Axe 440 Jobs After Losses

The company reported that sales of its Lumia phones for the quarter increased by 32% to 7.4 million units. However, sales of its Devices and Services division declined by 6% to €2.7 billion. The total number of Nokia phones sold declined by 4% quarter over quarter to 53.7 million units. As a result, Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) incurred  $0.06 losses per share on €5.7 billion revenue.

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According to a spokesperson for Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V), the legacy mobile division is a part of its business that does not include smartphones. The spokesperson expressed certainty about the company’s restructuring, however he indicated that the planned workforce reduction might be “much smaller than 440” positions.

Nokia Job Downsizing Starts Today

The spokesperson said, “The planning is starting today. That means the consultations with the 440 employees who may be affected are getting underway as per the normal practice. So, the exact net impact is not yet known, but what is certain is that the total number of job losses will be much smaller than 440.”

Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) stated in its financial statement that its aims to remove some of its employees out of the legacy service to “improve the efficiency of its operations, and its long-term competitive investments.”

Nokia Job Losses May Be Offset By New Positions

The Finnish smartphone manufacturer added, “In order to respond to industry dynamics, Nokia’s Mobile Phones business unit is planning to focus its product offering with the aim of improving product competitiveness and delivering more innovation.” Furthermore, the company said that although it will eliminate a maximum of 440 jobs globally, it will also create a number of new positions, and it might redeploy some of its employees.

Early this year, Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) cut 300 IT jobs and outsourced 820 positions to HCL Technologies Limited (NSE:HCLTECH) (BOM:532281) and Tata Consultancy Services Limited (BOM:532540) (NSE:TCS).

The management of the Finnish smartphone manufacturer observed that its mobile phone sales showed improvement in the latter part of the quarter.

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