Alternative OS smartphone maker Jolla in death valley, laying off staff

After Nokia, it’s the turn of another Finnish phone-maker to sail into troubled waters. Today Jolla announced that it failed to close its latest financing round. The company has filed for a debt restructuring program in Finland, and will “lay off a big part of its personnel.”

Jolla was founded four years ago with a vision to provide an alternative in the mobile world with its buttonless smartphones running on its own open source gesture-based operating system Sailfish. The Jolla phone was launched in September last year in India, where Nokia had ruled the roost until the smartphone boom slayed the feature phone giant from Finland. Jolla also inked a deal with Hutchison Telecom carrier Three to sell the phones in Hong Kong with an eye on the large Chinese smartphone market.

Jolla claims its Sailfish OS offers device manufacturers an avenue for differentiation from Android-based interfaces which are prevalent on most smartphones in Asia. The open source OS also gave more scope for customization, especially to businesses looking for a secure mobile environment.

Lost time and money in developing phone and OS

Antti Saarnio, chairman and co-founder of Jolla, says several potential clients, both large and small, are interested in using the Sailfish OS, which is commercially ready and in great shape. “Unfortunately, the development until this point has required quite a lot of time and money. To get out of this death valley we need to move from a development phase into a growth phase. At the same time, we need to adapt our cost levels to the new situation,” says Antti Saarnio.

In the absence of the follow-up funding which was expected by this month-end, the company filed for a debt restructuring program in Helsinki today. “With this the company aims to get more time to arrange the future financing of the company,” says the Jolla chairman.

The layoffs of Jolla’s employees will begin next month.

See: A big step for Xiaomi and a giant leap for India: smartphones made in Andhra