Nokia has become the latest mobile company to announce job cuts, axing around 1000 positions.
Nokia Networks is to cut its 23,000 strong global workforce by between 900 and 1,000 people. The measure has been necessitated by the continually slowing demand for mobile systems, as telecoms operators struggle to make ends meet. Nokia’s main competitors, Ericsson, Lucent and Nortel, have already been forced into cutting their workforces.
The cuts will be made in Nokia’s infrastructure division, which until recently it had been trying to grow to compete with archrival Ericsson in mobile infrastructure. Losses will be made gradually over the course of the remainder of the year, after consultation with the relevant labor representatives., whenever they may arrive.
Until recently though Nokia was thought to be surviving the turbulent times unscathed, then came the company’s profit warning earlier this month. Now this cost cutting step shows how deep the storm is raging. Nokia’s share price has also suffered in recent months, halving since its year high of E48.50. In fact, today alone it has fallen 3.5% on Helsinki’s stock exchange, dropping to just E24.65.
The Finnish company’s announcement comes only a day after Philips’ proclamation of its intent to cease handset manufacturing, at a cost of over 1000 French jobs. Nokia’s predicament then is not an isolated one in today’s struggling telecommunications market. The stress that companies are under due to delays in the launch of 3G is beginning to cause cracks in even the strongest operators.
