Nokia to Cut 3,500 Jobs by 2012

Nokia Corp. (NYSE:NOK) on Thursday announced that it is extending its job cuts to 3,500 by the yearly 2012 to save company costs.

The move is also the result of the company losing investor confidence in its ability to compete against its rivals, leading to constant falling of the share prices and market share in the global market.

The Finland based cellphone manufacturer said that by the end of 2011 it will be shutting down a manufacturing plant in Cluj, Romania which will directly impact about 2,200 jobs including adjustments in supply chain operations. An additional 1,300 job cuts will also be laid off reflecting other changes.

These organized layoffs are in addition to the more than 7,000 job cuts across the world which Nokia announced in April through outsourcing and layoffs. In early trading in Helsinki, Nokia’s stock was unchanged at $5.66.

The announcement came to light as the world’s leading cellphone maker plans to diminish operating expenses by $1.5 billion by 2013 amongst severe competition in the top end smartphone market from Apple Inc. (NASDAQ:AAPL) and Google’s (NASDAQ:GOOG) Andorid based smart phones, as well as from various Asian handset manufactures that are producing cheaper handsets. Nokia has lost its number one smartphone position to reach number 4 after in global market space.

Nokia said it was shutting down the Romanian plant because its Asian factories provide higher volume production scale and proximity benefits that translate into huge savings. CEO Stephen Elop said that Europe will be a core center for Nokia’s future. He also added that the job layoffs and other steps taken are painful but necessary for the organization as it struggles to cut company costs.

The cellphone maker is also in the process of shunning its Symbian based smartphones for Microsoft Corp. (NASDAQ:MSFT) Windows Phone OS based smartphones. The Symbian operating system will be slowly shunned by the Finnish manufacturer, along with the thousands of software developers working on the platform. The company’s previous attempt to invest in the MeeGo operation system in partnership with Intel Corp. also came to an end with more than $2 billion investments leading to only the launch of one commercially launched handset. The company will be depending on Microsoft’s operating system to pull the company back into profit. Elop’s decision to choose Microsoft over Google was also criticized by many investors who believed that he was showing favoritism towards the organization where he held a top post earlier.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.