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