Finland’s Nokia might be the world’s leading maker of mobile handsets, but that doesn’t mean the company is immune to global economic turmoil—in fact, because Nokia sells entry-level handsets so deeply into developing markets, it might actually be more vulnerable to global economic stress than, say, a luxury-only phone company in Cupertino. So it comes as little surprise that Nokia today announced plans to cut 1,700 more jobs in a cost-cutting move intended to streamline its operations and adapt to a changing market.
About 700 of the cuts will come in Nokia’s native Finland. Some will come in Nokia’s handset unit, but others will come in its marketing unit (for instance, eliminating activities no longer needed since the Symbian acquisition), corporate development office, and technology management.
Overall, Nokia hopes to cut the annual costs of its handset unit by about $900 million. The announcement comes after the company announced a small round of job cuts last November. Nokia has also offered severance packages to some employees who choose to leave the company, and will cut back production at a key plant in Salo, Finland.
Industry watchers expect the global cell phone market to contract in 2009, with several estimates forecasting phone sales in 2009 being around 10 percent lower than 2008.