Nokia joins slimming trend with 700 job cuts

Late winter is always a good time to slim down, it seems.
Nokia Corp., which employs some 68,000 people worldwide, announced it will cut 700 jobs, about one percent of its workforce. The cuts-or, in Nokia-speak, “adjustment needs”-will fall mostly on the vendor’s enterprise solutions group, with some cuts in information technology and customer and market operations. Half the cuts will affect workers in Finland, the company said.
Nokia said that “convergence, increased complexity and strong growth in emerging markets” required continuous renewal and improved operations, thus efficiency steps such as the jobs cuts became necessary. The company said that it would focus more closely on enterprise markets offering greater return on investment. The company added that workers whose jobs are cut will have a shot at internal openings, if they’re qualified.
Further job cuts are expected as Nokia embarks on a joint venture with Siemens AG for infrastructure, which may require cuts of 10 to 15 percent of the 60,000-person employee base, the companies have said.
Analysts have forecast a cool first half of the year for replacement handset sales in mature markets, which many handset vendors depend on to shore up average selling prices and margins-a factor that also may have affected Nokia’s plans for job cuts. Nokia made solid earnings on huge volumes in emerging markets late last year, while rival Motorola Inc. failed to garner healthy margins, despite impressive volumes. Motorola announced last month that it would layoff about 3,500 workers, which analysts interpreted as preparation for an extended cooling in the handset market.
Nortel Networks Ltd. and Alcatel-Lucent have also recently announced job cuts.