Mobile handsets manufacturing company Nokia announced on Thursday that Nokia will cut 10,000 jobs globally. Nokia also announced that they will be shutting some of their plants. It would be total 40,000 job cut-off until Stephen Elop took the command of Nokia in May-2010.
After the news of cut-off headlined TV screens Nokia’s shares dropped by 16% at $2.36. Since Nokia announced to switch to Windows mobile phones in February this year, its shares have fallen by almost 70%.
Nokia has taken the cut-off decision due to the huge expected loss in the second quarter because of growing competition among it’s rivals. The cut-off will result in 2 billion U.S. Dollar savings by 2013. Currently Nokia has around 124,800 employees across 120 countries. Cut-off will also result in Nokia booking additional restructuring charges of around 1.26 billion U.S. dollars.
Nokia said that the plans will be initiated before the end of 2013. Nokia has already beginning the process of engaging with employee representatives in accordance with country’s specific legal requirements. Nokia also announced to sell their luxury phone ‘Vertu’ to a European firm EQT. But the company didn’t disclose the bidding price of the phone.
The Finnish Mobile manufacturing company was the world’s largest vendor of mobile phones for about 14 years until Samsung dethroned Nokia and topped with 25% of total market share. Apple’s i-Phone and Android mobile market are pushing Nokia out of the race. In 2007, Nokia was valued at 110 billion EUR, while today in May 2012, its valued at 14.8 billion EUR. So it’s sure that Nokia is now facing the battle of it’s existence.