HELSINKI: Nokia workers are bracing for what may be the steepest job cuts in al-most two decades as the world's largest maker of mobile phones pre-pares to start a partnership with Microsoft . A reduction in research and development activities is set to be announced by the end of the month, with as many as 6,000 jobs under threat, said Antti Rinne of Pro, Finland's biggest private-sector office-worker union. That would be equivalent to 38% of the Finnish company's global devices R&D work-force. Nokia declined to comment on the numbers.
"We have said we are planning to say more about the impact on our personnel in the last week of April," said Nokia spokeswoman Paeivyt Tallqvist, adding that any announcement won't be restricted to Finland and the plans include starting negotiations with employee representatives. "We have not given any figures or estimates."
Chief executive officer Stephen Elop said on Feb. 11 that Nokia will adopt Microsoft's Windows Phone 7 as its main smartphone operating system over the next two years, a move triggering "substantial reductions in employment." As he phases out Nokia's homegrown Symbian and MeeGo systems, workers haven't been told who may hang onto their jobs.
"This doesn't make for very efficient or creative working conditions," said Kalle Kiili, an engineer in Tampere, a research site that employs 3,000 workers, and represents the YTN union. "This waiting is expensive and we've already had a reorganization of R&D in 2009 and another reorganization of Symbian in the second half of 2010, just as the organisation was starting to work properly again."
At 3 billion euros ($4.3 billion), Nokia's 2010 research budget for devices, which include products ranging from basic handsets to smart-phones that can edit documents and show movies, is more than twice Apple's entire $1.78 billion R&D budget.
Nokia Tuesday unveiled an updated version of the Symbian smartphone software and two new smartphones that will run it. The E6 business phone combines a Qwerty keyboard and a touchscreen. The X7 entertainment phone has a large display to play games and an 8-megapixel camera for taking pictures and high-definition-quality videos. Both handsets will start ship-ping in the second quarter, Nokia said.
Since Apple shipped its first iPhone in 2007, Nokia's share of smartphone sales by volume has shrunk 20 percentage points to 30.8% in the final quarter of 2010, according to researcher Gartner. At the end of last year, Nokia employed 16,134 people in R&D for devices and services, a company filing showed.
"The reductions are likely to come gradually, over the next 12 months because they have some further development in the pipeline for Sym-bian," said Michael Schroeder, an analyst at FIM Bank in Helsinki who has a "reduce" rating on the stock. "The expectation is that after the transition period they would have cut a third of their device R&D spending compared to what it was in 2010, so that would mean 1 billion euros in total."
Nokia has said the transition would extend into 2012. Under Finnish laws, companies must start negotiations with unions when they announce job-cut plans. Those talks typically last about six weeks.
Finland's Ministry of Employment has a working group that meets weekly with Nokia and others to review options for helping people through the transition, said Paasivirta. Asked about the reorganisation, finance minister Jyrki Katainen told Bloomberg News Monday that he expects Nokia to do its best to create new opportunities for those who will lose their jobs.
Nokia has about 21,000 workers in Finland, or 16% of its global headcount including the networks venture with Siemens, according to filings. The figure also includes a smartphone factory in Salo with about 2,000 employees. In November 2009, Nokia Siemens announced plans to eliminate 5,760 jobs. The venture cut as much as 15% of 60,000 positions when it was created in 2007. In 2008, Nokia closed a handset plant in Bochum, Germany, slashing about 2,300 jobs. Nokia announced reductions of 1,700 jobs in sales, marketing and management in March 2009 as consumer demand fell in the global recession.
Nokia shut an R&D site in Jyvaskyla in 2009, leaving R&D groups in Salo near the factory as well as Tampere, Oulu and the capital area which includes Helsinki and Espoo. Other devices R&D locations in-clude Beijing, Bangalore, Copenhagen, and San Diego, as well as Ulm, Germany, and London and Farnborough in the UK Nokia also maintains a network of 13 research centers working on longer-term projects such as sensor technology and 3-D interaction.
"We have said we are planning to say more about the impact on our personnel in the last week of April," said Nokia spokeswoman Paeivyt Tallqvist, adding that any announcement won't be restricted to Finland and the plans include starting negotiations with employee representatives. "We have not given any figures or estimates."
Chief executive officer Stephen Elop said on Feb. 11 that Nokia will adopt Microsoft's Windows Phone 7 as its main smartphone operating system over the next two years, a move triggering "substantial reductions in employment." As he phases out Nokia's homegrown Symbian and MeeGo systems, workers haven't been told who may hang onto their jobs.
"This doesn't make for very efficient or creative working conditions," said Kalle Kiili, an engineer in Tampere, a research site that employs 3,000 workers, and represents the YTN union. "This waiting is expensive and we've already had a reorganization of R&D in 2009 and another reorganization of Symbian in the second half of 2010, just as the organisation was starting to work properly again."
At 3 billion euros ($4.3 billion), Nokia's 2010 research budget for devices, which include products ranging from basic handsets to smart-phones that can edit documents and show movies, is more than twice Apple's entire $1.78 billion R&D budget.
Nokia Tuesday unveiled an updated version of the Symbian smartphone software and two new smartphones that will run it. The E6 business phone combines a Qwerty keyboard and a touchscreen. The X7 entertainment phone has a large display to play games and an 8-megapixel camera for taking pictures and high-definition-quality videos. Both handsets will start ship-ping in the second quarter, Nokia said.
Since Apple shipped its first iPhone in 2007, Nokia's share of smartphone sales by volume has shrunk 20 percentage points to 30.8% in the final quarter of 2010, according to researcher Gartner. At the end of last year, Nokia employed 16,134 people in R&D for devices and services, a company filing showed.
"The reductions are likely to come gradually, over the next 12 months because they have some further development in the pipeline for Sym-bian," said Michael Schroeder, an analyst at FIM Bank in Helsinki who has a "reduce" rating on the stock. "The expectation is that after the transition period they would have cut a third of their device R&D spending compared to what it was in 2010, so that would mean 1 billion euros in total."
Nokia has said the transition would extend into 2012. Under Finnish laws, companies must start negotiations with unions when they announce job-cut plans. Those talks typically last about six weeks.
Finland's Ministry of Employment has a working group that meets weekly with Nokia and others to review options for helping people through the transition, said Paasivirta. Asked about the reorganisation, finance minister Jyrki Katainen told Bloomberg News Monday that he expects Nokia to do its best to create new opportunities for those who will lose their jobs.
Nokia has about 21,000 workers in Finland, or 16% of its global headcount including the networks venture with Siemens, according to filings. The figure also includes a smartphone factory in Salo with about 2,000 employees. In November 2009, Nokia Siemens announced plans to eliminate 5,760 jobs. The venture cut as much as 15% of 60,000 positions when it was created in 2007. In 2008, Nokia closed a handset plant in Bochum, Germany, slashing about 2,300 jobs. Nokia announced reductions of 1,700 jobs in sales, marketing and management in March 2009 as consumer demand fell in the global recession.
Nokia shut an R&D site in Jyvaskyla in 2009, leaving R&D groups in Salo near the factory as well as Tampere, Oulu and the capital area which includes Helsinki and Espoo. Other devices R&D locations in-clude Beijing, Bangalore, Copenhagen, and San Diego, as well as Ulm, Germany, and London and Farnborough in the UK Nokia also maintains a network of 13 research centers working on longer-term projects such as sensor technology and 3-D interaction.
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