Nokia to shuffle R&D, sales and marketing workers

Nokia, the world's top handset maker, said Thursday it plans to reshuffle 700 employees over the next few months, citing a need to improve its focus and efficiency.

Nokia will try to move some employees into new positions in the company, while others could take voluntary severance packages, said Arja Suominen, vice president of communications. She said she did not know many employees would be laid off, although the company will study the shuffle.

Those affected are 360 employees in Nokia's Enterprise Solutions business group; 140 in the Software Platforms area of its Technology Platforms unit; 130 who deal with the company's global IT operations; and 30 in Customer and Market Operations.

It wasn't clear where the remaining 40 employees work, although Nokia said the changes would affect a maximum of 700 workers. Nokia said 340 of those staff affected are based in Finland. Nokia employs 68,000 worldwide.

Nokia said its Enterprise Solutions division would take a sharper focus on markets where there is a greater return on investment.

Nokia posted losses for the division in every quarter in fiscal 2006, including an operating loss of €64 million (US$83 million) in the fourth quarter.

"It's very clear we will need to make that business profitable," said Olli-Pekka Kallasvuo, president and CEO of Nokia, referring to the enterprise division. "We're looking at different options in order to do that." He spoke during a press conference at the 3GSM World Congress in Barcelona on Monday and didn't hint at the cuts announced on Thursday.

Nokia said it also wanted greater efficiency from the R&D efforts of its Technology Platforms unit.

Nokia has suffered declining sales in North America while the average selling price of its models has also fallen.

However, profits and revenue have remained strong, and the company reported a 19% increase in net profit for its fourth quarter ended Dec. 31, 2006, over a year prior, up to €1.3 billion.

(Nancy Gohring in Barcelona contributed to this report.)

The IDG News Service is a Network World affiliate.