Nokia and Job Security Don't Play Well Together
It's a tough economy out there, and a little bit of job security goes a long way. Unfortunately for gadget giant Nokia (NYS: NOK) , that notion is long gone.
Early last year, the Finnish company announced that it was slashing 7,000 jobs worldwide as it concentrated its resources on its smartphone strategy, leveraging its partnership with Microsoft (NAS: MSFT) . Shortly after, an additional 3,500 unlucky workers were given the boot, with most of these from a Romanian manufacturing facility.
The latest round of cuts tallies up to 4,000 jobs related to manufacturing that are getting slashed. The cuts will be at manufacturing plants in its home turf of Finland, as well as in Hungary and Mexico. These factories will instead be tasked with software development while Nokia focuses on its Windows Phone pipeline.
Nokia intends to move assembly to its factories in Asia closer to component suppliers in order to "increase the company's competitiveness in the diverse global mobile device market." The change should improve Nokia's time-to-market, while the company will offer support and assistance for local re-employment.
It's been about one year since Microkia announced their relationship to the world, and Nokia's cumulative layoff tally is up to 14,500. At the end of last year, the company had a total of 130,000 employees, including those at its Nokia Siemens joint venture. Nokia Siemens itself also announced 17,000 job cuts late last year.
The news is gloomy but expected as part of CEO Stephen Elop's turnaround strategy and cost-cutting initiatives. Just glancing at Nokia's fourth-quarter results is proof that drastic action is needed as Apple and Google run amok in mobile market share.
This is the foundation of a potential turnaround for the smartphone maker, but it has an awfully long way to go before it can win this Fool's stamp of approval.
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At the time this article was published Fool contributorEvan Niuowns shares of Apple, but he holds no other position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Microsoft, Apple, and Google.Motley Fool newsletter serviceshave recommended buying shares of Microsoft, Apple, and Google and creating bull call spread positions in Apple and Microsoft. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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