Nokia’s stock price suffered as the company announced on Thursday its plan for rightsizing, including a further reduction in the number of jobs by the end of next year. The stock price is not expected to recover anytime soon, as the company is showing losses and even closing its operations on some locations.
The company based in Finland had expanded its operations to other parts of the world and achieved the status of a giant multinational company. However, the current losses are forcing them to shut down some of their facilities. Their facilities in Canada and Germany dedicated to research and development are being closed. Also, a plant in their home country is being planned to be closed.
As competition has immensely increased in the mobile phone market, it has become a tough job for Nokia to popularize its phones.
"These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia's long-term competitive strength. 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," Stephen Elop, the CEO of Nokia, said, as reported on betanews.com.
The company’s management realizes that they need to reorganize the research and operations to come up with new and innovative designs and regain their competitive position in the market. Their previous leading position has long been lost to other, popular smartphone manufacturers like Apple and Samsung, so a new strategy was indeed required for a bright future of the business.
"We intend to pursue an even more focused effort on Lumia, continued innovation around our feature phones, while placing increased emphasis on our location-based services. However, we must re-shape our operating model and ensure that we create a structure that can support our competitive ambitions," Elop said.