Nokia (NOK) CEO Stephen Elop says 20% of his company’s workforce will have to go, as the Finnish phone maker struggles to say afloat between the tidal waves that are Samsung and Apple. The company said it will continue to invest in new technologies as it seeks to cut annual operating expenses by almost $3 billion by the end of next year.

Roughly 10,000 Nokia employees will lose their jobs by the end of 2013. In April 2011, Nokia announced 7000 job cuts, and in November 2011 Nokia Siemens Networks said it would cut 17,000 jobs.

Nokia also said today that it will lose more money than expected in the second quarter. During the first quarter, Nokia lost roughly $1.7 billion. Executives had previously predicted that the company’s operating margin would stay at roughly -3% in the second quarter. Today Nokia said the margin would be below -3%, but did give any more specific information.

“Competitive industry dynamics are negatively affecting the Smart Devices business unit to a somewhat greater extent than previously expected,” the company said in a press release. But Elop said Nokia will continue to invest in its Lumia line of Windows-based smartphones. “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,” he said. Nokia has already invested heavily in location-based services, and recently launched Nokia City Lens, a navigation and visual search application for Lumia.

Today Nokia announced that it plans to add to its imaging capabilities by buying imaging assets from Swedens’ Scalado for an undisclosed amount. Nokia says Scalado’s imaging technology is already part of more than 1 billion devices. The company says the acquisition will allow it to combine its leadership in camera devices with Scalado’s expertise in imaging,

“Nokia has an excellent history of producing attractive, well built handsets, including the current crop of Lumia devices. As a result they are prime targets for a takeover bid,” says Julian Jest, research analyst at Informa Telecoms and Media. But many investors are apparently tired of waiting. The stock is off sharply on disappointment with the near-term outlook.

Nokia also said today that it has agreed to sell its Vertu luxury phone business to private equity group EQT VI. Vertu is headquartered in the UK and employs about 1,000 people worldwide.

As part of the restructuring announced today, Nokia is closing facilities in Ulm, Germany and Burnaby, Canada, and is replacing several top executives. Timo Toikkanen will replace Mary McDowell steps down as executive vice president of Mobile Phones. In addition, Nokia’s chief marketing officer and executive vice president of markets are both leaving. Starting July 1, Chris Weber will be executive vice president of Sales and Marketing; Tuula Rytila will be senior vice president of Marketing and Chief Marketing Officer, and Susan Sheehan will be senior vice president of Communications.
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(Full disclosure: the author owns NOK stock)