Nokia cuts staff by 1,700

Nokia will cut its staff by 1,700 as it tries to grapple with falling phones sales, it announced on Tuesday.

Nokia will cut its staff by 1,700 as it tries to grapple with falling phone sales, it announced on Tuesday.

The cuts will affect Nokia's Devices and Markets units as well as its Corporate Development Office and global support functions, according to a statement. The cuts will be made globally. The largest number of layoffs will be made in Finland, where a maximum of 700 people will be laid off, according to Eija-Riita Huovinen, communications manager at Nokia. The U.S. and U.K. will also see cuts, she said, without going into detail.

Nokia first announced plans to make staff cuts on Jan. 22 when reporting its fourth-quarter results, which showed that sales were down about 19 percent year on year. The company sold 113.1 million phones in the quarter, a decline of 15 percent from a year earlier and also lower than the 117.8 million it sold during the third quarter. Nokia, like other vendors in the sector, aims to lower its costs. The company plans to cut more than EUR700 million (US$900 million) in costs by next year.

On Feb. 11 Nokia detailed a first round of cuts, announcing it will be closing its R&D site in Jyväskylä, Finland. In the process, about 320 employees will be laid off. The company is also making temporary cuts at its production facility in Salo.

The mobile phone arena, like many other markets, has been hit by the economic downturn. A fourth quarter that was dismal at best set the stage for a very rough 2009, according to market research company IDC. Fourth quarter shipments fell by 11.6 percent year over year, marking the first time the holiday quarter has not recorded double digit growth in seven years, IDC said in a statement. It expects mobile phone sales to drop by approximately 8 percent in 2009.

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