Design Con 2015

Job cuts—It’s not just Nokia

-June 15, 2012

The news is out--Nokia's cutting yet another 10,000 jobs, putting Vertu, its luxury handset unit on the block. It’s hard to remember that it was just five years ago that iPhone came crashing onto the scene, sealing the fate of Nokia, and others, in the process. When Android reared its green head, who knew that firmly entrenched Nokia would suffer to this extent. It’s not just on the expensive phone side that the company lost market share, but also on inexpensive and basic phones as well.

Recently, Nokia bet the farm on its Widows-based phones, the Lumia series, unfortunately, even with some fairly cool bells, whistles, and other music, the marketplace did little more than to yawn.

Adding the proverbial insult to injury, Samsung, lagging behind Nokia in sales until Q1 this year, just announced a major bounce in operating profits and that its Galaxy S III will imminently hit the US in spite of the patent war with Apple.

Nokia has hardly been the only victim—Motorola, once a number one player, and RIM, who initially dominated the smartphone market, have both fallen dramatically.

This was the competitive landscape just five years ago.

 

In comparison, here’s the landscape through Q4, 2011 (Source: Asymco) where graphically, the Nokia 10,000-job loss becomes clear.

So, who else announced job cuts this year?

HP eliminated 27,000 jobs, shaving $3 billion from its annual expenses. Yahoo announced a 14% cut, and expectations are that RIM will whack between 2,000 to 6,000 jobs as well. Unmerged T-Mobile announced 2,250 jobs lost. Sprint announced a mere 100 jobs cut and Ericsson 1,400.

Sony said in April it will cut about 10,000 of its 168,000 worldwide employees, and NEC kicked off 2012 with a 10,000 jobs lost announcement. IBM cut 1,000 jobs in the U.S.

Challenger, Gray & Christmas, announced on May 31 that job cuts have hit an 8-month high of 61,887—and that was without the Nokia figures. In a recent press release, the company stated that 245,540 jobs overall were cut since January 1—just in the U.S.

While on one hand disruptive technologies do account for the majority of the mobile phone shakeup, there is a silver lining for the national job landscape. The 245,540 jobs cut this year is lower than the 258,319 jobs lost in the first five months of 2010 and definitely an improvement over the 822,282 jobs cut in the same period in 2009.

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