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Nokia cuts jobs to win smartphone market

Feb 08 2012 11:34 AFP

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Helsinki - World-leading mobile phone maker Nokia intends to cut 4,000 jobs at its smartphone manufacturing facilities in Finland, Hungary and Mexico by the end of 2012, it said on Wednesday.

"The expected headcount impact by country is 2 300 in Komarom (Hungary), 700 in Reynosa (Mexico) and 1 000 in Salo (Finland)," company spokesperson James Etheridge said.

The job cuts follow a review of smartphone operations announced in September 2011, when the company warned jobs may be cut at the plants in question.

The factories in Komarom, Reynosa and Salo will in the future focus on software-heavy smartphone customisation, while manufacturing will shift to Asia to shorten the time it takes for products to get to market, the company said in a statement.

"But these planned changes are all about speed and responsiveness and ultimately, our competitiveness," Etheridge said.

The job cuts come as Nokia struggles to secure a foothold in the fiercely competitive smartphone market, with its newly-launched smartphone flagship line Lumia failing to correct falling sales in its overall smartphone business.

In its 2011 full-year earnings report released two weeks ago, Nokia said it had sold "well over one million" Lumia phones since their launch in October, as it established competitive "beachheads" in Europe, Hong Kong, India, Russia, Singapore, South Korea and Taiwan.

Nokia is depending heavily on the new phones to help maintain its ranking as the world's largest mobile phone maker as it operates in a rapidly changing landscape with RiM's Blackberry, Apple's iPhone and handsets running Google's Android platform take growing bites out of its market share.

In the fourth quarter, Nokia sold just 19.6 million smartphones - 31% fewer than in the same quarter of 2010 and far behind market-leader Apple, which reported 37 million units sold, and runner-up Samsung, which announced 36.5 million smartphone sales in the quarter.

Nokia registered a net loss of €1.2bn in 2011, compared to a net profit of €1.8bn a year earlier, while the final quarter of the year was hammered with a €1.07bn net loss after a profit of 745 million in the same period a year earlier.

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