They've lost the plot when they started to ignore the limitations of Symbian, probably because they had invested so much on it very early in the game and so it had gained almost 100% mindshare among their engineers. Then the iPhone came out and the leadership lacked courage to tell engineers that Linux was the future and they should all retrain RIGHT FUCKING NOW; instead there was a lot of internal politicking, keeping Maemo at bay and trying to put lipstick on the Symbian-UI pig.
Some of those layoffs are deserved, in a way, since resistance to change was coming from below as much as from above. Shame that it took an idiotic leader making the worst possible choices to make people see the error of their ways.
They still sell T9 even today.
They should've kept supporting Symbian, but focus on Maemo (or a new OS) from day one (after the iPhone launched). Supporting WP7 over Android will probably be the final biggest mistake that Nokia did.
Is hardware > software or is software > hardware or is software ≈ hardware?