Moody's has downgraded the Finnish phone maker Nokia to below investment grade, known as junk status.
The rating's agency said that Nokia's outlook remained negative, a day after Nokia announced 10,000 job cuts.
The Finnish phone maker lost its 14 year position as the world's biggest phone maker earlier this year as Samsung moved ahead of it.
Moody's said "Today's rating action reflects our view that Nokia's far-reaching restructuring plan ... delineates a scale of earnings pressure and cash consumption that is larger than we had previously assumed."
Following the news, Nokia, saw its share price plunge more than 16 percent on the Helsinki stock exchange.
The company, which has been undergoing a major restructuring for more than a year, said it would implement an additional €1.6 billion in cost reductions by the end of next year, especially affecting its beleaguered Devices & Services unit.
"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 chief executive Stephen Elop said in a statement.
