Nokia fires boss as it battles to turn around its fortunes

Microsoft's Stephen Elop to be phone group's first non-Finnish chief executive

Nokia ended months of uncertainty by firing its beleaguered chief executive Olli-Pekka Kallasvuo, in a bid to turn the mobile giant around. Mr Kallasvuo leaves the group after three decades – including four years as chief executive – with a severance package worth almost €5.5m (£4.5m).

Nokia's board said Microsoft executive Stephen Elop would take over as president and chief executive of the company in 10 days' time, the first non-Finn to head the company in its 145-year history.

One of the biggest failures in Mr Kallasvuo's reign has been Nokia's inability to compete in the high-end smartphone market, which has left it trailing behind Apple and Google.

Jorman Ollila, chairman of Nokia said the decision to oust Mr Kallasvuo had been a hard one. However, he said: "The time is right to accelerate the company's renewal and to bring in new executive leadership with different skills and strengths in order to drive company success." He added that the former head had handled the situation "gallantly".

Mr Kallasvuo has stepped down from the board with immediate effect and will relinquish his role on 20 September, though he will continue to chair the board of Nokia Siemens Networks. "His dedication and contribution throughout the years has been exceptional," Mr Ollila said.

Nokia's board has been reviewing the group's strategy for almost a year, he said. "In late May we started a chief executive search process. It has been an extensive process with the whole board actively involved."

Ben Wood, an analyst at CCS Insight, said: "This appointment brings to an end the protracted uncertainty over Nokia's leadership. Ending the months of speculation is good news."

Mr Elop, a Canadian whose background is in computer engineering, headed Microsoft's business division. He joined the technology group after also holding senior positions at Juniper Networks, where he was chief operating officer, and president of worldwide filed operations at Adobe Systems. He came to Nokia's attention during recent talks with Microsoft over deepening their co-operation.

Mr Ollila said: "Stephen has the right industry experience and leadership skills to realise the full potential of Nokia. His strong software background and proven record in change management will be valuable assets as we press harder to complete the transformation of the company."

Mr Wood said: "He is a complete contrast to Kallasvuo; he is more charismatic – in an era when it is increasingly important to have energising leaders, such as Steve Jobs at Apple, or Eric Schmidt at Google, Kallasvuo struggled." He added that the new appointment could be the spark required to shake up the group. "There are lots of people inside Nokia who know what needs to be done but haven't been given the mandate."

Mr Elop has some mobile phone industry experience, but his background is in software, "which is crucial for Nokia", Mr Wood said. "There is no question about their pedigree in hardware, but their software has been found wanting."

Mr Elop talked of the fundamental shifts in the mobile industry. "My job is to lead this team through this change and take this organisation through a period of disruption."

Nokia's new boss faces a daunting challenge to turn the company around. What turned out to be Mr Kallasvuo's final quarterly results announcement at the end of July showed profits had fallen almost a third between April and June. The previous month the company issued a profit warning, which sent the shares tumbling. The share price itself has declined 75 per cent in just three years. Yesterday's news sent the shares up 4 per cent to €8.

Mr Wood said: "Nokia has all the pieces of the jigsaw but doesn't know what the picture is. Let's hope the new chief executive can see it."

The change at the top comes just days before the mobile company's showpiece event Nokia World in London. Mr Kallasvuo was scheduled to present the keynote, but in a hasty reshuffle Nokia has replaced his speech with one from the company's executive vice-president of markets Niklas Savander.

Talk was expected to focus on the N8, its next-generation smartphone, which will be shipped to the UK next month. Mr Wood said the device "needs to be the foundation of Nokia's recovery".

Start your day with The Independent, sign up for daily news emails
Life and Style
A still from the 1939 film version of Margaret Mitchell's 'Gone with the Wind'
David Silva strokes home his and City's second goal
Arts and Entertainment
a clockwork orange, stanley kubrick
The Tesco Hudl2: An exceptional Android tablet that's powerful, well-built and outstanding value

Sarah Silverman (middle) with sister Reform Rabbi Susan Silverman (right) and sister actress Laura Silverman (left) at Jerusalem's Western Wall for feminist Hanuka candle-lighting ceremony
peopleControversial comedian stages pro-equality Hanukkah lighting during a protest at Jerusalem's Wailing Wall
After another poor series in Sri Lanka, Alastair Cook claimed all players go through a lean period
Arts and Entertainment
The Bach Choir has been crowned the inaugural winner of Sky Arts’ show The Great Culture Quiz
arts + ents140-year-old choir declared winner of Sky Arts' 'The Great Culture Quiz'
Life and Style
food + drinkAuthor DBC Pierre presents his guide to the morning after
Life and Style
food + drink
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas