The Finnish phone giant said it will cut 1,800 employees, or 1.4% of its 128, 237-person staff. The cuts will be focused mostly on its Symbian/smartphone unit and also in its Ovi wireless services business, new CEO Steve Elop told analysts on an earnings conference call Thursday.
The cuts come as Nokia attempts to turn around its performance as it continues to fall behind smartphone sales trends led by rivals including Apple's (AAPL) iPhone and Google's (GOOG) Android devices.
Looking ahead, Elop, who came to Nokia from Microsoft's (MSFT) business software unit earlier this year, warned that a shortage of parts like screens and cameras will continue to impair the company's production of low priced phones into 2011.This is an unpleasant development for Nokia, given that its key strength has been its steady performance in cheaper phones despite stumbles in the smartphone market. Asked if Nokia would consider abandoning its Symbian/MeeGo operating system in favor of other software like Android or Microsoft's Windows 7, Elop said probably not. This should quiet speculation that Nokia was throwing in the towel on its own sputtering software push. Nokia's goal, Elop told analysts, was to have a sustainable, differentiated and complete solution in smartphones. "When you consider alternatives it is unclear how we could maintain differentiation on those paths," said Elop. Elop, it can now be said, prefers the integrated approach of software, hardware and services on Nokia's own designs. This is an Apple-like approach to phones and not a Motorola (MOT) or Samsung-type focus primarily on hardware. As for Nokia's timing for re-entry into the U.S. market, Elop said it was too early to make any specific announcements, but added that Nokia's global strategy has been successful. In the U.S., where the telcos determine what phones are accepted and sold, Elop said he planned to spend time working on these partnerships. After a strong start in the U.S. over a decade ago, Nokia has now nearly completely exited the market, due to an inability to mollify the big telcos, namely AT&T (T) and Verizon (VZ). In his conference call summary, Elop said while it was still "early days" in his turnaround bid, he added that there were many "unpolished gems" at Nokia. Nokia shares, which have fallen 20% in the past year, rose 4% to $10.83 in early trading Thursday. --Written by Scott Moritz in New York.
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