Nokia to cut 3,500 jobs by 2012

update Layoffs will affect employees in Germany, Romania and U.S. as handset maker implements major restructuring. Malaysian-based spokesperson says still unclear if job cuts will trickle to Asia.
Written by Jamie Yap, Contributor

update Nokia has announced it will cut 3,500 jobs in Germany, Romania and the United States by the end of 2012 as the Finnish handset maker goes through a major restructuring. The impact on its Asia-Pacific operations is unknown for now.

Besides announcing the layoffs, the Finnish handset maker said in a statement it would shut down a plant in Cluj, Romania, by the end of this year, AFP reported Thursday. The company said it's also reviewing whether to close other factories in Finland, Hungary and Mexico.

In addition, Nokia was looking to reorganize its maps business by focusing its mapping and commercial development operations in Berlin, Boston and Chicago, and will close these operations in Bonn, Germany and in Malvern, U.S., according to Dow Jones Newswires.

"With these planned changes, we will emerge as a more dynamic, nimble and efficient challenger," Nokia CEO Stephen Elop said. "We must take painful, yet necessary, steps to align our workforce and operations with our path forward."

The latest job cuts come on top of the 4,000 announced earlier in April, as well as the transfer of 3,000 Symbian employees to Accenture.

When contacted, a Malaysian-based company spokesperson told ZDNet Asia it was not able to comment on the impact of the headcount reductions on the Asia-Pacific region.

In February, Nokia announced its partnership with Microsoft to use the latter's Windows Phone 7 mobile operating system (OS) to curb the handset maker's slipping market share against dominant players Apple and Android. It also announced plans to discontinue its Symbian OS.

Craig Cartier, analyst for ICT practice at Frost & Sullivan, said in a statement the job cuts indicated Nokia was focusing on its core strategy of developing smartphones within the Windows Phone ecosystem. "Unfortunately for Nokia, this also represents further struggles to realize that strategy," he pointed out.

Nokia has put all its eggs in the Microsoft basket, but the latter has not returned the favor or slowed down to wait for Nokia, Cartier said. "Just two weeks ago, U.S. carrier AT&T announced launch partners, HTC and Samsung, for the Mango release of Windows Phone 7 [and] Nokia was noticeably absent from that list," the analyst added.

"Nokia, even at times of strength, has struggled in the U.S. market, a problem the Microsoft partnership was supposed to remedy.

"For now, it seems like that remedy will remain only future hope, as this development brings into question whether the former leading phone manufacturer can, as promised, bring Windows Phone devices to market before the critical holiday sales period of 2011," he noted.

If this does not materialize, Cartier predicted that today's announcement might not be the last of the job cuts at Nokia.

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