Nokia's earnings forecast falls again as company plans 10,000 job cuts

 

NOKIA OYJ reduced its earnings forecast for the second time this year and said it will cut as many as 10,000 more jobs and shut production and research sites in chief executive Stephen Elop’s biggest overhaul.

The stock fell 18 per cent to the lowest level since 1996, pushing Nokia’s market value below $10 billion. As part of the changes, sites in Finland, Germany and Canada will be closed and executives Niklas Savander, Mary McDowell and Jerri DeVard will leave, Espoo, Finland-based Nokia said today. Elop, who took over as chief executive in 2010, is reorganising Nokia after market-share gains by Apple’s iPhone and Samsung devices led to a slump in sales and four straight quarterly losses. The company risks going out of business in as little as two years unless it reduces expenses, said Alexander Peterc, an Exane BNP Paribas analyst in London.

“They are trying to survive,” said Mr Peterc, who has an underperform rating on the stock. “They can’t continue like this.”

Nokia said the second-quarter adjusted operating margin at the devices unit will be worse than a loss equivalent to 3 per cent of revenue in the first quarter. Nokia had projected margins to be “similar to or below” the first-quarter level. Nokia fell 39.6 cents to 1.83 euros at the close of trading in Helsinki. Its stock has fallen by 58 per cent in 12 months. – (Bloomberg)