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Nokia lays off thousands, sells luxury brand
Nokia has announced that it plans to lay off thousands of employees and sell its luxury brand Vertu in a bid to “return the company to profitable growth”.
The embattled mobile giant apparently plans to reduce up to 10 000 positions globally by the end of 2013. Among the sections of the company highlighted for closure are its research and development facilities in Ulm, Germany and Burnaby, Canada and its manufacturing facility in Salo, Finland.
“These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia’s long-term competitive strength,” said Elop. “We do not make plans that may impact our employees lightly, and as a company we will work tirelessly to ensure that those at risk are offered the support, options and advice necessary to find new opportunities.”
The company also announced that it would be selling its luxury mobile brand Vertu to EQT VI, a European private equity firm. Nokia will, however, retain a 10% stake in the company.
The company is reportedly looking at saving approximately EUR 1.6-billion of additional cost reductions by the end of 2013.
In the midst of all these reductions, Nokia has been buying. The company announced that it has acquired assets in Swedish mobile imaging site Scalado:
In Smart Devices, Nokia plans to extend its strategy by broadening the price range of Lumia and continuing to differentiate with the Windows Phone platform, new materials, new technologies and location-based services. In line with this strategy, Nokia today announced the planned acquisition of assets from Sweden-based Scalado, which currently has imaging technology on more than 1-billion devices. This acquisition is aimed at strengthening Nokia’s imaging assets.
Nokia says the acquisition is part of its plans to differentiate its Lumia range of smartphones.
The type of medicine Elop is handing out is harsh. More chemotherapy than band-aid, Nokia’s shareholders will be hoping that it doesn’t kill the company along the way.
