Nokia to cut another 1 700 jobs

Nokia, the world’s leading cellphone maker, said on Tuesday it planned to cut another 1 700 jobs worldwide as part of cost-cutting measures to offset falling handset prices and sales.

“Altogether these plans will affect about 1 700 employees globally. Where applicable, Nokia will start consultations with employee representatives about these plans,” the company said in a statement.

The new job cuts would affect people working at the company’s device and markets units, as well as at its corporate development and global support divisions, it added.

Nokia’s head of communications, Arja Suominen, said the new job cuts were part of previously announced plans to slash costs by about $909-million or more over the next couple of years.

“We have since announced several initiatives. This is a new initiative,” she said, adding that details on how many jobs would be cut in which countries and units would become clearer as the negotiations proceed.

“Layoff processes and layoff times are different in different countries,” Suominen said.

Company spokesperson Piia Kaeppi, meanwhile, said about 700 of the jobs were likely to disappear in Finland, while units in the United States and Britain would also be impacted by Tuesday’s announcement.

A French spokesperson said some of Nokia’s 120 employees in France would also be affected.

Like many other companies, Nokia was caught off guard by the speed with which the global financial crisis spread last year, hitting its sales before it could ramp down costs to offset the impact.

When the company in January reported a 69% slump in its fourth-quarter earnings due to falling handset prices and sales, company chief Olli-Pekka Kallasvuo said job cuts would be necessary but declined to forecast how many employees would be made redundant or which units would be hit.

“We must continue to invest into our future and at the same time reduce costs. It will mean a reduction in our employee base,” he said at the time, adding that visibility for 2009 remained very limited.

Last month Nokia announced plans to cut 1 000 jobs globally through voluntary departures, as well as about 400 involuntary layoffs in its native Finland due to the reorganisation of its research and development operations.

Analysts, however, lamented that the cellphone giant had moved too slowly to cut costs in the face of crisis.

“Profitability in the first half [of 2009] will be weak because its costs correspond to a totally different kind of demand” than what exists in the current market conditions, Fim Bank analyst Michael Schroeder told AFP, adding that more cost cuts would certainly be needed.

In addition to struggling with the effects of the financial crisis, Nokia has seen its sales hit by the launch of Apple’s smart phone, which has lured away customers with new kinds of devices and services.

The Finnish company has said it plans to launch its own Ovi Store for smart phone applications and content in May.

Nokia, which counts 128 000 employees worldwide, has said it aims to grow its market share in 2009, which stood at 37% in the fourth quarter.

It has, however, forecast that global mobile device sales will fall about 10% this year.

After Tuesday’s announcement, Nokia saw its stock price slip 2,3% to 8,78 euros per share in early afternoon trading on the Helsinki stock exchange, which was down 0,8%. — AFP

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Related stories

Nokia and Nasa to install 4G on the Moon

Installing a wireless network on the Moon is just one step toward establishing a long-term human presence there

France won’t bar but may restrict Huawei in 5G network

There has been intense debate in Europe about whether or not to exclude Huawei from supplying equipment for 5G mobile networks

Continuity is key to fixing education

​The M&G went to the World Innovation Summit for Education to find out how other countries are dealing with education problems similar to SA’s

SA drops in World Press Freedom rankings

South Africa has dropped three places in the Press Freedom Index

Get up, stand up: Jamaica rises

Banyana’s face-off against the Reggae Girlz is an opportunity to leave the Cyprus Cup in the past

Amnesty accuses Nordic states of failing rape survivors

An Amnesty report says flawed legislation, harmful myths and gender stereotypes had resulted in "endemic impunity" for perpetrators

Subscribers only

Covid-19 surges in the Eastern Cape

With people queuing for services, no water, lax enforcement of mask rules and plenty of partying, the virus is flourishing once again, and a quarter of the growth is in the Eastern Cape

Ace prepares ANC branches for battle

ANC secretary general Ace Magashule is ignoring party policy on corruption-charged officials and taking his battle to branch level, where his ‘slate capture’ strategy is expected to leave Ramaphosa on the ropes

More top stories

Under cover of Covid, Uganda targets LGBTQ+ shelter

Pandemic rules were used to justify a violent raid on a homeless shelter in Uganda, but a group of victims is pursuing a criminal case against the perpetrators

JJ Rawlings left an indelible mark on Ghana’s history

The air force pilot and former president used extreme measures, including a coup, enforced ‘discipline’ through executions, ‘disappearances’ and floggings, but reintroduced democracy

Sudan’s government gambles over fuel-subsidy cuts — and people pay...

Economists question the manner in which the transitional government partially cut fuel subsidies

Traditional healers need new spaces

Proper facilities supported by well-researched cultural principles will go a long way to improving the image and perception of the practice of traditional medicine

press releases

Loading latest Press Releases…