1,800 jobs to go at Nokia Networks

10 Apr 2003

The world’s largest mobile phone maker, Nokia, has announced it is to lay off 1,800 people at its infrastructure arm Nokia Networks.

The company which employs around 30 people in Ireland – half in Networks and half in mobile sales, said that 1,100 of these jobs would be lost in Finland with the remainder divided among other countries.

Currently there are 17,360 people employed at Networks and 51,740 at Nokia worldwide.

The reductions will be made in research and development (R&D) operations, sales and marketing and in support functions.

The decision was made amid predictions that it is heading for its third quarterly loss in a row at publication of its first quarterly results next week, as demand continues to fall.

Last month the Finnish company warned that sales at its Network unit would fall by up to 20pc year-on-year in the first quarter.

Both Nokia and rivals such as Ericsson (who, it’s believed, is preparing for more major lay-offs) have been facing hard times of late as telecoms operators try to cut spending on upgrading networks after years of growth.

The announcement comes following warnings in February that Nokia would lay off 550 people at Networks, which it’s understood does not generate as big a proportion of revenues and earnings as its main mobile phones unit.

Nokia said it was taking the measure to “reduce costs, improve profitability and further strengthen its leadership position in the mobile infrastructure business”.

It added: “These decisions were taken against the backdrop of the market guidance given by the company on 11 March that Nokia Networks would post a substantial loss for the first quarter of 2003 as well as general market conditions in the network infrastructure business.”

“The focusing of R&D includes a review of costs, scope, timing and number of programmes and reducing the number of product configurations in light of the current customer and business situation. The target is to ensure the market, product and architectural leadership position in the GSM, EDGE and WCDMA markets, while further increasing the focus and efficiency of R&D activities,” it continued.

President of Nokia Networks Sari Baldauf said: “We are determined to continue with our leading position in mobile networks. The measures outlined today support this objective.”

“Together with our relentless focus on customer needs and operational efficiency they will enable a sustainable and profitable business for the future,” he added.

By Suzanne Byrne