Mobile phone manufacturer Nokia has announced that it will eliminate a further 1700 jobs amidst worsening economic conditions and a sharp decrease in global demand for its products.
In a stern statement, the Finnish company said that the cuts were made to "increase cost-efficiency and adapt to the market situation."
Nokia has already laid off hundreds prior to today's announcement and it is unlikely that they will be the last as it assesses other areas for potential savings.
Around 1,000 Nokia employees had also chosen voluntary redundancy packages but the combined job losses are not likely to make a dent on the 128,500 Nokia employees worldwide.
For now though, the 1700 pink sheets are expected to be issued to the personnel working in the devices and markets units as well as in corporate development and global support, a sizable amount of whom are actually based in Finland
Nokia envisages to save nearly $1 billion by end of 2010 as it recorded a 19 percent fall in sales year-on-year in January 2009. Figures for the last quarter reported a 15 percent drop to 113.1 million mobile phones.
Mobile phones sales in general are expected to fall significantly with research firm IDC betting on a 8 percent fall this year. However smartphones, which tend to have more features and are likely to be more expensive, are expected to buck the trend.
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Nokia needs to be careful as to where it will go now. The biggest phone manufacturer will be facing competition on all fronts. The iPhone is already eating away high end markets while the likes of Sony Ericsson and Samsung are proving to be tough cookies when it comes to the lower end of the market. Symbian might be helpful in the medium to long term as Nokia tries to increase the average selling price of its mobile phones.
(The Money Times)