Jolla late last week filed for debt restructuring and said that a large number of staff will be temporarily laid off, casting doubt over the future of the company.
The Finnish smartphone OS maker, established by former Nokia employees, has run out of money after its latest funding round was delayed.
"Typically for start-ups, Jolla has gone through several death valleys along its four year journey. We’ve fought them throu gh and now we are facing again a great challenge," said Antti Saarnio, chairman and co-founder of Jolla, in a statement on Friday. "To get out of this death valley we need to move from a development phase into a growth phase."
Jolla was formed in 2012 by former Nokia engineers who worked on the company’s MeeGo smartphone platform. The company developed the Sailfish OS and its own devices; however, in July it spun off the hardware division, opting to focus instead on licensing Sailfish to device makers.
It has signed up its first partner in the shape of Indian electronics maker Intex, which aimed to release a phone this year.
Jolla now seems to have run aground financially, and has filed for debt restructuring in Finland in order to buy it some time to secure a new source of funding.
A Jolla spokesman explained in an email to Total Telecom that debt restructuring in Finland is handled on a case-by-case basis, so it is unclear at this point how long the process will take.
In the meantime, Jolla will be run by a skeleton staff.
"We are keeping critical functions running through the transition period, meaning that most of our staff are temporarily laid off," said Jolla’s spokesman.
According to Finnish newspaper Aamulehti, more than half of Jolla’s approximately 100 employees are affected.
