Nokia loses more jobs, but doesn't plan deeper cuts
Published: 17 March, 2009
READ MORE: Nokia
Nokia is plowing ahead with its cost reduction plans, announcing a further 1,700 job cuts globally, with 700 of these coming in its Finnish homeland. The company stressed that the moves are part of the efficiency plan it announced in the wake of poor quarterly results in January, and do not reflect any further worsening of its outlook.
The latest cuts are part of a program that aims to reduce annual costs in the Devices and Services business - Nokia's main one - by more than €700m ($909m) by the end of 2010.
The markets are holding their breath to see whether Nokia - whose market share of close to 40% makes a hugely important bellwether for the whole sector - will cut its forecasts further before it announces its Q1 results in April. In January, Nokia altered its outlook for the whole handset industry from a 5% reduction in sales to a slide of 10-11%.
Nokia said the reductions reflect the tightening of consumer demand, which has led it to prune its handset portfolio for 2009-2010; the removal of some activities that are no longer necessary following the Symbian acquisition; and the continuation of a program to streamline R&D in the devices business. The last will involve greater use of standardized platforms and processes to save cost and time to market.
The handset giant's statement said: "Nokia continues to seek savings in operational expenses, looking at all areas and activities across the company." The importance of this was highlighted in January when the company slashed its dividend and put share buybacks on hold to preserve cash, and later sold €1.75bn in bonds to raise additional funds.
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