When it rains it pours at Nokia. The Finnish company today announced not one but four separate items of news — a major strategy refresh with revised forecasts; a host of executive departures and several internal appointments to replace them; the final confirmation at its luxury folly brand Vertu is gone; and the intention to acquire imaging specialist (and Nokia partner) Scalado.
The disparate nature of that list, and sheer number of simultaneous announcements, both underscore the dire situation at the company and how the changes it still needs to make to turn itself around, to make itself into a mobile leader once again, are pulling it in different directions at once.
The news has sent the company’s stock down by more than 10 percent at the time of writing — with the main reason for that probably coming from the fact that it has revised down its forecasts for the next quarter, which will be reported on July 19.
Here’s a walk-through of the main points of the four different news items:
– Strategy overhaul: I’m going to look at this one a little more closely in a separate post but here are the basics: Nokia will lay off another 10,000 employees by the end of 2013 (something that shouldn’t come as a surprise) by reducing R&D and streamlining in manufacturing, marketing, and possibly more sell-offs; the company also noted that it is cutting costs, to the tune of €1.6 billion by the end of 2013, but it is also taking restructuring charges and as a result it has forecast that its operating margin will be -3% when it reports its next results in one month.
– Exec changes: A significant swipe has been made through Nokia’s upper ranks, with some of the key, North American people at the top now gone. Jerri DeVard, executive vice president and chief marketing officer; Mary McDowell, executive vice president of Mobile Phones; and Niklas Savander, executive vice president of Markets are now all gone. DeVard joined only a year and a half ago and was one of Elop’s first key appointments; she’d come over from Verizon and was seen as a key operator in getting Nokia back on track in the North American market where it has performed so poorly for years. McDowell is something of a veteran of the company, having joined in 2004 before all of its big iPhone/Android competitive woes hit, and she’s held roles at different divisions with the latest in charge of all non-smartphones. Savander is the longest-serving of them all and is a member of the old guard if there is one, having been at the company since 1997. His departure will leave some wondering what is the foundation of the company right now if it’s not the new team, or parts of the old team.
To replace them, Nokia’s made some internal appointments — again a sign of how it is not hiring anyone new at the moment but trying to work with what they have. Juha Putkiranta is now executive vice president of operations; Timo Toikkanen is executive vice president of Mobile Phones, Chris Weber is executive vice president of sales and marketing; Tuula Rytila is senior vice president and chief marketing officer; and Susan Sheehan is senior vice president of communications. Putkiranta, Toikkanen and Weber also will join the Nokia Leadership Team effective July 1, 2012.
– Vertu: This is the luxury-phone division that made blingy phones with precious stones and metals for the uber-rich, along with concierge services to go with them. Not a mass-market success, and possibly even a challenge with the upper crust, who are happy enough to flaunt their status through a fabulous case for their iPhones and Androids. The division had long been rumored to be on the block, with the latest report coming yesterday for the company to go to PE firm EQT for €200 million. Today’s news doesn’t confirm that price but it does confirm EQT as the buyer.
– Scalado: A separate post for this, too, but here are the basics again. The financial terms are not being disclosed; Nokia will keep Scalado operating in Lund, Sweden, and it will add it to its other imaging R&D and development/manufacturing. However, there is all chance that some of those other operations will be consolidated/downsized given the company’s wider reduction plans. Nokia’s been working with Scalado for 10 years already and the company has other clients, like RIM.
The full list of announcements is here and there is more to come. Refresh for updates.