With Nokia announcing layoffs at a global scale, analysts are doubtful if this move will prove to be of any help to the company. It is set to cut down on 10,000 jobs worldwide, approximately 19 percent of its existing workforce. 3,700 of these job cuts will be in Finland. This is an attempt by the company to cut costs and shore up their declining revenue.
Nokia has closed down two of its research centers, one factory and seen the departure of three senior executives in recent times. Once upon a time they led the mobile phone market, but owing to stiff competition from Apple’s iOS and Google’s Android, their share and sales have dropped, resulting in losses in the last four quarters. In the first quarter itself, Nokia’s net sales in China dropped by 70 percent. However, they are now focusing on their core strategy, looking to adjust their operations in China and elsewhere, as stated by the director of the company’s public relations in China, Gao Xiang. Analysts are also expecting job cuts in China.
Nokia is now phasing out their Symbian operating system. In collaboration with Microsoft they have produced their Lumia range of smartphones that run on the Windows Phone platform. However, it may not be possible for the Lumia series to raise Nokia’s sales, win back users and carriers fast enough for the company to survive. Therefore, even this move may not help the company arrest their dwindling position in the market, with their total mobile shipments falling by 24 percent in the first quarter. Furthermore, Samsung has replaced Nokia as the leading producer of handsets in the market. Samsung’s sales of smartphones in China was the highest, followed by Huawei Technologies, placing Nokia in the third position.
Though Samsung, ZTE and HTC have also started offering phones running on Windows Phone, Windows Phone accounted for only 0.7 percent of smartphone sales as compared to 76.7 percent of Android phones in China. In spite of Nokia facing losses on account of the transition to the Windows Phone platform in the first and second quarter and their market value and share price witnessing a drop, the company can still use their sales network in major cities as well as in third and fourth tier cities in China to their advantage.
