Nokia, the world's biggest cellphone maker, announced plans, on Thursday in Helsinki to cut up to 1,000 jobs in its network operations worldwide to improve efficiency and competitiveness in a weakening global market. The layoffs will be made gradually but are expected to be completed by the end of the year, Nokia said. Nokia networks employs 23,000 people.
Earlier this month, Nokia announced it will cut 300 jobs at a phone production plant in Bochum, Germany, and gave a profit warning for the second quarter.
Arja Suominen, from Nokia networks, said most of the layoffs will be made abroad with some 200 job cuts in Finland. The central question is that we are adjusting ourselves to market conditions, and in this way aiming to maintain our competitiveness in the long term, Suominen said.
Until recently, Nokia maintained optimism amid an industry slowdown and largely had avoided the layoffs and losses announced by its chief rivals, LM Ericsson of Sweden and No 2 mobile phone maker, US-based Motorola.
But two weeks ago, it said an economic downturn in the United States - its main market - had spread to other regions and the wireless economy as a whole. "We have recently seen a weakening in market conditions to levels below our earlier estimates," Jorma Ollila, Nokia's chief executive, said on June 12.
Nokia lowered its expectations for revenue growth from 20 per cent predicted in April to less than 10 per cent for the three-month period ending June 30.
Bureau Report