Nokia has announced plans to close several R&D and manufacturing facilities, overhaul its leadership and cut 10,000 jobs by the end of 2013 in order to return to 'profitable growth.'

The Finnish giant, which was recently replaced by Samsung as the largest mobile manufacturer on the planet, is also looking to cut back expenses at its Devices & Services division by reducing headcount and minimising its 'factory footprint'.

Going down

Said rescaling comes alongside news that Nokia is lowering its outlook for Devices & Services in Q2 2012.

The company had previously expected the division's non-IFRS operating margin to be similar to or below Q1 2012 level of negative 3 percent.

Nokia now claims the division's non-IFRS operating margin will be below negative 3 percent.

The Finnish firm hopes that its cost-cutting efforts will put the embattled OEM back on "a clear path to profitability", with further, more forward-looking measures also on the table.

Eye on investment

Nokia is to invest in products and experiences designed to make its Windows Phone powered Lumia range stand out to consumers.

Further investment will also be made to improve the profitability of its remaining feature phone business, while funding for location-based services will enable it to become "an area of competitive differentiation for Nokia products."

"We intend to pursue an even more focused effort on Lumia, continued innovation around our feature phones, while placing increased emphasis on our location-based services," said CEO Stephen Elop.

"However, we must re-shape our operating model and ensure that we create a structure that can support our competitive ambitions."

Shake-up

Part of that 'reshaping' is a radical leadership shake-up.

Executive VP and CMO Jerri DeVard, executive VP of mobile phones Mary McDowell, and executive VP of markets Niklas Savander are all stepping down from their roles.

In their place will come Juha Putkiranta, who has been appointed executive VP of operations, Timo Toikkanen as executive VP of mobile phones, and Chris Weber as executive VP of sales and marketing.

Also joining the firm are Tuula Rytila as senior vice president and CMO, and Susan Sheehan as senior VP of communications.

"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," concluded Elop.

The news comes as Nokia looks to sell off its luxury handset brand Vertu for a reported €200 million.

[source: Nokia]