Channel reacts to Nokia’s job cuts and plant closures

The channel has reacted to Nokia’s announced job cuts and plant closures.

Some have said they are worried about their marketing budgets, while others have said they are not surprised by the move.

The comments come as the Finnish phone maker today announced that it would be handing around 10,000 employees, across the world, their pink slips.

In a further drive to drill down costs it also said that it would close research and development projects such as Ulm in Germany and Burnaby in Canada. Also facing closure was the company’s Salo manufacturing plant.

The closures, plus the sale of the company’s luxury Vertu mobile brand to equity firm EQT, has concerned one partner, which told ChannelBiz UK that the lack of products could mean less work for resellers. This is despite the company claiming that it plans to continue to focus on smartphones and feature phones in the future.

“Closing plants and selling parts of its business only makes Nokia look unstable in our eyes,” the source told us. “We want to find another vendor but we have a long contract with the company.

“The fact that its taking these actions may, and I say, may, have a knock on effect on the channel in general,” the source said. “Less plants mean less products, less products mean less revenue, which means less training and marketing for us.”

Others weren’t surprised at the moves, confirming Nokia had been in dire straits for a long time.

“In September last year Nokia made some big promises to us,” this separate partner said. “Not only did it assign three new distributors but it also launched its Partner Network, which was claimed to
provide us with product training, sales support and ‘care’ to telecom dealers and IT resellers.”

“However although it opened this with huge fanfare we’ve not really seen too much difference in terms of care, and like an old theme park it seems like these new plans have been left to stand for too long and gone rusty,” the source said. “Now, with these announcements we know why. We’re sure the channel will be affected despite no mention of it in the company’s latest press announcements.”

Another separate partner said it expects changes. “10,000 jobs are a lot to cut, with there being any implications for us,” the partner spokesperson said, speaking with ChannelBiz UK. “Whether it be in call centres when we need help, or marketing products or training, we know we are going to see changes for the worse in the future.”

Despite making enormous cuts, Nokia is still spending what little cash it has.

Today it announced that the company had acquired imaging firm Scalado.

Under the plans the company will acquire the company as well as all its technologies and intellectual property.

Håkan Persson, chief executive officer of Scalado AB, said: “This is a great opportunity for many of our people to show their leadership in imaging and to continue to build its future.

“Doing this as part of Nokia, already a leader in mobile imaging, will reinforce the strength of the technologies and competences developed at Scalado. We are very excited about this opportunity, which is a natural next step in our longstanding relationship with Nokia.”

The Lund site is planned to become a key site for Nokia’s imaging software for smartphones, while Scalado is expecting to continue to exist and adhere to any present customer agreements and obligations.

The transaction, which is subject to customary closing conditions, is expected to close during the third quarter of 2012. The terms of the transaction have not yet been made public.