Nokia Corp. is slashing 10,000 jobs globally and closing plants, including a research and development office in Burnaby, B.C. and another one in Ulm, Germany, the company said Thursday.
The company will also close its core manufacturing plan in Salo, Finland, to save costs and streamline its operations. It will retain a search and development centre there.
A spokesman for Nokia said in an email to The Canadian Press Thursday that the company couldn't offer additional details on the number of Burnaby employees affected by the closure, or other specific locations.
The cuts come as the Finnish company struggles against tough competition from Apple's iPhone and other manufacturers that use Google Inc.'s popular Android software, including Samsung Electronics Co.
It's also being hit hard by Asian manufacturers of cheaper phones, such as China's ZTE.
Finland-based Nokia announced one of its worst quarterly results in April, reporting a CDN$929-million net loss as sales plunged, particularly in the smartphone market.
"These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia's long-term competitive strength," Nokia CEO Stephen Elop said.
"We are increasing our focus on the products and services that our consumers value most while continuing to invest in the innovation that has always defined Nokia."
Boston-based Strategy Analytics said Nokia had lost significant market share to Samsung, which pushed it out as the world's largest seller of cell phones by volume, grabbing a 25 per cent global market share against Nokia's 22 per cent.
In the first quarter, Nokia fared even worse in the smartphone sector against Samsung and Apple by dropping to third place in sales at 12 million units sold compared with Samsung's 44.5 million and Apple's 35 million.
Nokia also gave an updated outlook, stating that "competitive industry dynamics" in the second quarter would hit its smartphone sector to a "somewhat greater extent than previously expected" and that no improvement was expected in the third quarter.
The company's share price plunged more than 7 per cent in morning trading.
Despite the cuts announced Thursday, Nokia still plans to focus on the smartphone market as well as cheaper feature phones. It also plans to expand located-based services.
"Nokia is significantly increasing its cost reduction target for devices and services in support of the streamlined strategy announced today," said CFO Timo Ihamuotila.
"With these planned actions, we believe our devices (and) services business has a clear path to profitability. Nokia intends to maintain its strong financial position while proceeding aggressively with actions aimed at creating shareholder value."
With files from The Associated Press
