Nokia announced Thursday that it will cut up to 10,000 jobs worldwide by the end of next year, as part of a cost reduction program to stay viable.
The Finnish cell phone maker hopes this moved helps in the increasingly competitive smart phone market. The company warned that its second and third quarters would be more disappointing than expected, as its operating loss margin increases. Before Thursday’s announcements, Nokia’s US stock had tumbled by 42 percent, and pre-market trading saw it fall another 8 percent on Friday.
“These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia’s long-term competitive strength,” a statement released by Nokia CEO Stephen Elop said.
Research and development facilities in Germany and Canada will also become casualties of Nokia’s cost reduction efforts. The company’s upcoming Lumia phone, which operates on Microsoft’s mobile software, is said to be its largest focus. Nokia is currently fighting for its space in the cellphone market with Apple and Google, which closed a $12.5 deal last month to purchase Motorola Mobility.
Up until losing the title to Samsung in the first quarter of 2012, Nokia reigned as the world’s largest cell phone company for 14 years. Since the launch of Apple’s iPhone in 2007, Nokia has seen a 30% drop in shipments, and fell from first to a distant third on the list of smartphone leaders.