Nokia to lay off about 600 employees

Facing a weakening economy worldwide and new competitors, Nokia on Tuesday said it planned to cut about 600 employees.

The bulk of affected workers -- 450 -- will be in sales and marketing in Nokia's Markets unit, the manufacturing, distribution, and sales and marketing group created earlier this year as part of a companywide restructuring. One hundred of those people will be in Finland, where Nokia is headquartered.

(See a slideshow on the most notable layoffs of 2008.)

Nokia also plans to let go of about 130 people who do long-term research for Nokia Research Center. The change will result in fewer areas of research for the group, Nokia said. The majority of those cuts will also affect workers in Finland.

Nokia's global process operations will lose 35 employees and the company plans to close an office in Finland, relocating workers based there to another office in the country.

The layoffs will come into effect Jan. 1, 2009.

The announcement comes on the heels of a poor third-quarter financial report for the number-one handset maker in the world, which revealed that earnings dropped 28% and revenue was down 5% compared to last year. The company also lost market share.

Nokia faces challenges around the world. The economic downturn is affecting sales in established markets like Europe, where Nokia faces new competitor Apple with its popular iPhone. While the mobile-phone market is still growing in less-developed regions, people there tend to buy lower-cost phones, causing a drag on revenue even while Nokia's overall phone sales have continued to go up.

The IDG News Service is a Network World affiliate.