As MMi reported earlier this week, Nokia is planning a massive rollback of its workforce. By the end of 2013, 10,000 current Nokia workers will find themselves out of a job.
Nokia Chief Executive Stephen Elop called the forthcoming cuts essential. "These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia's long-term competitive strength," he said. "We do not make plans that may impact our employees lightly, and as a company we will work tirelessly to ensure that those at risk are offered the support, options and advice necessary to find new opportunities."
A bigger immediate problem for Nokia than the planned cuts, however, is the struggling mobile phone maker's quarterly performance record of late. Not withstanding the company's plan to turn things around, Nokia says the next quarter may be even uglier than the last.
So in response to Nokia's ongoing and seemingly endless troubles, on Friday, Moody's downgraded Nokia's credit to "junk." As of this writing, all three major credit ratings firms have done the same. "Nokia's plan delineates a scale of earnings pressure and cash consumption that is larger than we had previously assumed,” a rep for Moody’s told the press this week.
So just how bad are things are Nokia? Their smartphone shipments have plummeted 60 percent year-over-year.
Source: Bloomberg
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