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Nokia job cull

June 14, 2012

Finnish mobile phone producer Nokia says it is planning to axe up to 10,000 jobs by the end of next year. The company says the layoffs are urgently needed to ensure long-term profitability.

https://p.dw.com/p/15EKT
A padlock on a container in front of a Nokia production site
Image: AP

Nokia of Finland - one of the world's biggest mobile phone makers - said on Thursday it will have to reduce its global workforce by around 10,000 by the end of 2013. Company bosses said in Helsinki that the measure was part of a massive cost-saving scheme.

"These reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia's long-term competitive strength, Chief Executive Stephen Elop said in a statement.

The news from Helsinki will have a devastating impact on Nokia's research and development center in Ulm, Germany, which will be shut down completely by the end of September this year, meaning a loss of 730 jobs.

Catching up with rivals

The ailing cell phone maker added it aimed to return the company to profitable growth by sharpening strategy and improving its operating model. Despite a significant reduction in operating expenses, Nokia would remain focused on its smartphones and feature phones and intended to expand location-based services.

"In addition to the already annualized run rate saving of approximately 700 million euros ($880 million) at the end of the first quarter of 2012, the company targets to implement approximately 1.6 billion euros in additional cost reductions by the end of 2013," the company announced.

Since early 2011, Nokia has been phasing out its Symbian smartphones in favor of a partnership with Microsoft, producing a first line of Lumia phones. The Finnish firm depends on them to help it stand its ground against fierce competition from RIM's BlackBerry, Apple's iPhone and handsets running Google's Android platform.

hg/pfd  (AFP, dpa)