Nokia Secures Profit Following Over 10,000 Employee Reductions

Nokia, the Finnish telecommunications giant, has announced a return to profit in the last quarter of 2012, marking a significant turnaround for the company. The profit of €255 million is a significant improvement from a loss of almost €1 billion in the fourth quarter of 2011.

The primary reason for this turnaround is the drastic restructuring initiative undertaken by the company. As part of this initiative, Nokia has completed its job cuts and outsourcing efforts, which were announced back in June 2012 as part of a 10,000 job reduction plan. This move affected 300 IT employees and 850 employees through outsourcing.

Despite the return to profit, Nokia's revenues are still in freefall. For the full year, sales dropped by 22% year-on-year, totaling €30 billion. The quarter's revenues were down 20% year-on-year, amounting to €8 billion.

Nokia shipped 15.9 million smartphones during the quarter. This includes 4.4 million Windows Phone-based Lumia devices, 2.2 million Symbian smartphones, and 9.3 million Asha touchscreen phones.

Stephen Elop, the CEO of Nokia, who took the position in 2010, has led the company through a critical period. He oversaw a major partnership announcement with Microsoft in February 2011 and the divestment of its "luxury smartphone" business, Vertu, in June 2012, both of which contributed to the decrease in sales at the smartphone unit.

Elop stated that the company's financial results are encouraging, with Nokia Group reaching underlying operating profitability in the fourth quarter and for the full year 2012. However, he acknowledged that the company still faces challenges in the rapidly changing mobile market.

The restructuring efforts have been the primary reason for Nokia's return to profit. By streamlining operations and focusing on its core products, Nokia has managed to turn its fortunes around. The company will continue to focus on its strategic partnerships and innovative products to maintain its position in the competitive mobile market.

In conclusion, Nokia's return to profit is a testament to the effectiveness of the drastic restructuring initiative. While the company still faces challenges, the return to profit provides a strong foundation for future growth.