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Wednesday, February 12, 2003

Now Its Nokia's Turn to Feel the Pain

Having been relatively sheltered from the havoc which has been reaked in the mobile industry, it seems reality is reaching home even in the blue chip department.

Nokia, the world's biggest maker of mobile phones, plans to cut 550 jobs in its networks business in the face of the continuing downturn in the global telecommunications infrastructure market. The Finnish company said the move, which will result in the closure of two research sites and a scaling back of R&D activity, would increase efficiency and reduce costs. Competitors such as Ericsson, Alcatel, Lucent and Nortel Networks have cut tens of thousands of jobs in the past two years. However, Nokia has been able to avoid such deep cuts to its workforce because of the profitability of its handsets business. Handsets account for 80 per cent of Nokia sales and the business has been much less hit by the telecoms market downturn than infrastructure. But Nokia's networks business has not been so lucky. The unit has seen more than 6,000 job losses over the past two years due to cuts, outsourcing and natural attrition.The latest job losses will hit Nokia employees in the US, UK, Sweden and Finland, with the US being hardest hit. The group plans to close its Santa Rosa broadband access facility in California, transferring most of its operations to Finland. It will also close an R&D site at Kista, north of Stockholm, in a further blow to Sweden's information technology and telecoms hot spot. Kista has already been hit by heavy lay-offs at Ericsson, the Swedish telecoms equipment group.
Source: Financial Times

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