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Nokia downgraded to junk status after job cuts, plant closures

Troubled cell phone maker cut 10,000 jobs and shutters main production plant.


June 15, 2012
by The Canadian Press

HELSINKI, Finland: Moody’s ratings agency has downgraded Nokia Corp.’s debt grade to junk status, citing greater than anticipated pressure on the struggling cellphone maker’s earnings after it announced plans for major cuts and global layoffs. and says the outlook remains negative.

The agency has lowered the Finnish company’s long-term senior unsecured ratings to Ba1 from Baa3 and left the outlook negative, saying Nokia’s “far-reaching restructuring plan, which involves drastically downsizing its infrastructure,” was greater than expected.

However, the agency said it sees Nokia’s restructuring as necessary for it to return to profitability.

The downgrade came a day after Nokia said it will slash 10,000 jobs, close plants and gave a grim outlook for most of the year.

©The Canadian Press