Nokia has bet its future on Windows Phone 7, but before CEO Steven Elop has a chance to prove that he isn’t just jumping from one burning platform to the next, he still has several challenges to overcome. Chief among them is a massive workforce that up until now, the company has maintained despite quarter after quarter of market share losses. Analysts knew Nokia couldn’t keep it up forever, and were not surprised to hear that the company is announcing over 3,500 layoff’s that will target manufacturing, location and commerce, as well as administrative staff.
The changes are painful, yet necessary, and will turn Nokia into a "more dynamic, nimble and efficient challenger," CEO Stephen Elop said in a statement. In addition to the layoff’s Nokia also announce it would be closing its factory in Cluj, Romania by the end of the year, likely as a result of productivity gains in its Asian facilities. Going forward, the company plans to concentrate its development efforts in Berlin, Boston and Chicago, while closing operations in Bonn, Germany, and Malvern USA.
Nobody likes to hear about job cuts, but Nokia likely had little choice in the wake of extremely light demand for its existing Symbian-based smartphones. It’s possible Nokia might be able to ramp up a bit once they get going with Windows Phone 7, but without the need to develop its own OS, they can likely run indefinitely with less in-house engineering.