Nokia, one of the world's largest cell phone makers, plans to cut 10,000 jobs from its global payroll by the end of next year.

The Finnish-based company expects the reductions will lower operating expenses by $1.3 billion.

Nokia Chief Executive Stephen Elop issued a statement Thursday saying, “These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia's long-term competitive strength.” Nokia announced it plans to close the company's lone manufacturing plant in Salo, Finland, but will continue research and development there.

The company intends to reduce certain research and development projects outside the country, resulting in the closure of facilities in Ulm, Germany and Burnaby, Canada.

Nokia also said it will closely assess the future of what it called “non-core assets.” The statement said the company plans to divest Vertu, its luxury mobile phone business, to a European private equity firm.

Nokia has been struggling to compete in the smartphone market.