Nokia looks set to announce major job cuts in its native Finland, the country's economy minister has announced.
Mauri Pekkanen told local business daily Kauppalehti that the government had held preliminary talks with the mobile firm over redundancies
The minister wouldn't be drawn on exactly how many workers face the axe, but said that job losses could be significant. The paper reports that Nokia employees fear thousands of jobs could go, but says that no protests are planned.
"This is the biggest structural reform which has ever impacted new technolody in Finland," Pekkarinen said, adding that the government would step in to help the areas worst hit by the cutbacks.
Nokia admitted that it was in talks with government officials, but could not comment on the job cuts.
The news comes on the same day as the troubled Finnish mobile maker has inked a deal with Microsoft to develop handsets for the software giant's Windows Phone OS.
The agreement marks a significant departure for Nokia, which has never previously developed phones for a third-party operating system.
The move has been seen in many quarters as evidence that Nokia's R&D strategy has hit the buffers in the face of competition from Apple's iPhone and new smartphones based on Google's Android OS.
Falling market share has led to boardroom upsets at Nokia, with former Microsoft man Stephen Elop brought in to replace ousted CEO Olli-Pekka Lallasvuo.
Elop's concern over the apparent failure of Nokia's MeeGo operating system was recently outed in a leaked internal memo that said the Finnish company was "burning".