NOKIA’s new chief executive Stephen Elop put his stamp on the company yesterday by cutting 1,800 jobs, equivalent to three per cent of the company’s workforce, and delaying the launch of a key product after the mobile phone manufacturer posted stronger -than-expected results.
It is not known whether UK workers will be affected by the job losses as the company said it had yet to decide where the axe will fall.
The news came as Nokia reported a third-quarter net profit of £471m, reversing a £491m loss for the same period last year. Despite the improved results Nokia said its market share dropped to just 30 per cent, it sold 110.4m phones in the third quarter.
Nokia shares rose to their highest level in 20 weeks on the news closing in Helsinki up 6.3 per cent.
Nokia benefited from the cheaper end of the mobile phone market but the average price for its phones rose to €65 — the first annual price rise in almost a decade – as new, cheap smart phones like the C5 and the E5 went on sale and parts shortages capped sales of the cheapest phones.
“The main contribution here is really from component shortages and that hit us more in the lower end were Nokia is strong,” chief financial officer, Timo Ihamuotila, said.
It said it expected part shortages to continue creating problems into 2011 and forecast operating profit margin to be 10-12 per cent in the fourth quarter.
Nokia’s N8 model, its first serious rival to Apple’s iPhone, started shipping on the last day of September but sales are yet to start in many markets.
Elop said he had decided to delay launching Nokia’s first product using the new MeeGo software platform, saying: “My assessment was that it would be a 2011 event.”
Elop is the first non Scandinavian to run the company in its history and only assumed his role last month replacing Olli-Pekka Kallasvuo.