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Nokia to cut 10,000 more jobs, sell luxury brand Vertu

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Nokia Lumia 800

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Mobile handset maker Nokia has announced plans to cut 10,000 more jobs worldwide and offload luxury brand Vertu as part of efforts to revive its flagging fortunes.

The new cuts bring the total planned reductions at the Finnish group to more than 40,000 since Stephen Elop became chief executive in September 2010.

According to a press statement today, Nokia intends to cut 10,000 positions globally by the end of 2013, and is currently engaging with unions in the various countries affected.

The company intends to close research and development facilities in Ulm, Germany and Burnaby, Canada, along with a manufacturing site in Salo, Finland.

Nokia, which has seen its share price slump more than 70% since February 2011, will have to pay an additional 1bn euros (£811m) in restructuring charges.

"These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia's long-term competitive strength," added Elop.

"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."

In April, Nokia was overtaken by Samsung as the world's biggest seller of mobile phones. The company has also fallen far behind both Samsung and Apple in the smartphone market.

Nokia sold 1m of its Windows Phone-powered Lumia 800 phones in the final quarter of 2011, but in contrast Apple shifted 1m iPhone 4S handsets in just one day after it was released last October.

As part of its turnaround strategy, Nokia has also been assessing the future of its non-core assets, resulting today in the sale of the luxury mobile phone business Vertu.

EQT VI, part of the leading private equity group in Northern Europe, has agreed to buy Vertu for an undisclosed sum. Nokia will retain a 10% stake in the company.

Headquartered in Church Crookham, UK, Vertu employs 1,000 people worldwide and produces high-end, luxury smartphones, often using precious metals and gem stones for the finish.

Despite the ongoing economic downturn, Vertu has recently delivered double-digit sales and launched its Vertu Concierge service, offering expert assistance, recommendations and priority bookings direct to its wealthy customers.

"With its strong brand, undisputed category leadership and attractive growth outlook, Vertu fits well with EQT VI's investment strategy," said Jan Ståhlberg, partner at EQT and investment advisor to EQT VI.

"EQT VI is excited about the opportunity to develop Vertu as a standalone company and plans to drive the development of the luxury mobile phone category through significant investments in retail expansion, marketing and product development

Vertu president Perry Oosting added: "This is a logical next step in the evolution of Vertu as the world leader in luxury mobile products.

"Since Vertu began in 1998, our business has grown every year, due to the efforts of our talented workforce and the unique products and services we offer to our customers. We believe that EQT VI will position Vertu to continue to grow and lead in our marketplace."

The Vertu sale is expected to close in the second half of 2012, subject to regulatory approval.

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