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Nokia to lay off nearly 10,000 workers

Marketplace Contributor Jun 14, 2012

Nokia to lay off nearly 10,000 workers

Marketplace Contributor Jun 14, 2012

Sarah Gardner: Today, news of the latest casualty from the wireless battlefront: Handset maker Nokia is adding another 10,000 workers to its layoff list. The company’s already announced 30,000 job cuts just in the past two years. Nokia’s also warning investors that its second quarter losses are going to be worse than they thought. Blame the competition from Apple’s iPhone and Google’s Android operating system.

So, can Nokia survive? Marketplace’s senior business correspondent Bob Moon reports.

Bob Moon: You don’t have to rewind very far to figure out why all this is starting to sound painfully familiar.

Montage of past Marketplace stories: “Nokia, the big mobile phonemaker, said today it’s laying off 4,000 people around the world…” “Nokia cut its revenue projections — just the latest step in a downward spiral…”

That news from last year only seems to be getting worse; this latest round brings the total number of planned layoffs since 2010 to one in every three Nokia workers.  

Ben Wood: It’s now laid off 40,000 people, which by any measure is dramatic.

Ben Wood is an analyst at Britain’s CCS Insight. He says without these cuts, the company feared it could face a cash crunch — even before it could introduce its full line of new Windows-based smartphones.

Wood: It’s absolutely clear these are make-or-break decisions that have been taken today.

But Wood says that doesn’t necessarily mean Nokia should be counted out. The company pivoted quickly to launch is first Windows phone recently.

And although sales in the U.S. and Europe have been less than hoped for, Gartner analyst Carolina Milanesi says there other places to grow. Nokia is a well-known name globally, and could be in a good position to take advantage of its brand — if it can just hold out long enough.  

Carolina Milanesi: In emerging markets, there’s a huge opportunity with economies improving in markets like India, for instance, and China — where you have users there that will be migrating to smartphones.

Still, analyst Ben Wood says Nokia has no room for error.

Wood: It’s still playing catch-up, and while it’s playing catch-up, other big companies like Apple and Samsung have made further strides forward.

Wood says today’s cuts could help put the company in a better position to stay in the game.

I’m Bob Moon for Marketplace.

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