George S. May Business Blog

Nokia announces further layoffs after forth quarter tumble

Nokia Corporation announced Tuesday that, in an attempt to cut costs worldwide, they will be handing out 1,700 pink slips.  Nokia is regarded as the world’s top phone maker, but apparently has been unable to sidestep the global economic downturn.

The job cuts are projected to affect sectors across the board from devices and markets units, the corporate development office and global support functions. Little particulars have surfaced, although we do know that they are aiming to save in the neighborhood of euro700 million, in its handset unit alone, over the next year.

Immediately following the announcement, Nokia shares dove 2.5 percent in Helsinki to euro8.76 ($11.42).

For those who have been paying attention to the market, industry, and company, in particular, this announcement should provide little surprise. At the start of the year, Nokia warned of a major cost-cuting move in response to its dreadful fourth quarter. Its fourth-quarter net profit crashed 70 percent to euro576 million ($744 million) and lost market share, which fell to 37 percent from 38 percent in the previous quarter and 40 percent in the fourth quarter of 2007.

This announcement will serve as a part-two to the layoffs that came in February. Last month, Nokia said it will close a research center, ax up to 320 jobs and temporarily lay off 2,500 workers in Finland. It also announced a global voluntary resignation program, open to employees until May 31, in a move aimed at cutting personnel by 1,000.

It has also said it plans to increase short-term unpaid leaves and sabbaticals, and has appealed to employees to accept holiday time as payments, instead of cash, for overtime work in 2009.

Nokia, based in Helsinki, currently employs 128,400 people worldwide.

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