Business VoIP

Weeks after calling for 1,000 employees to leave their company voluntarily, officials at the world’s largest maker of cell phones today announced that they’re laying off an additional 1,700 workers.

 

Officials at Finland-based Nokia say they’ll start consultations now with employee representatives.

 

“All of these measures are part of Nokia’s (News - Alert) previously announced plans to adjust business operations and cost base in accordance with market demand and safeguard future competitiveness,” company officials say. “Nokia continues to seek savings in operational expenses, looking at all areas and activities across the company.”

 

The news follows not only the call for voluntary departures, but also an announcement from Nokia that it would temporarily lay off 2,500 workers at its key manufacturing plant on a rotational basis, keeping between 20 percent and 30 percent of staff idle at a time.

 

According to Hallstein Moerk, Nokia’s head of human resources, the response from employees and employee representatives in proposing ideas to help reduce personnel-related costs has been encouraging.

 

“We have considered these and are now announcing voluntary initiatives that could contribute to our efforts to adjust our cost base to the current market environment,” Moerk said. “If successful, the voluntary initiatives will lessen the need for involuntary redundancies.”

 

The news comes, as the Associated Press reports, after the company warned of cost-cutting measures when its fourth-quarter net profit fell 69 percent.

 

“It also lost market share, falling to 37 percent from 38 percent in the previous quarter,” the AP reports.

 

Here’s a breakdown of the cell phone manufacturers’ market last year:

 

 

As TMCnet reported, Nokia – faced with an expected drop in shipments because of the recession and a perceived lack of new cell phone features this year – released plans recently to scale back on production.

 

According to Peter Ropke, Nokia’s senior vice president of devices R&D, in addition to the temporary lay-offs, the company plans to close its mobile devices R&D site in Jyväskylä, concentrating mobile devices R&D in Finland at its sites in Tampere, Oulu, Salo and the Helsinki metropolitan area

 

“Our employees in Jyväskylä are highly competent and have contributed to the creation of numerous hit products,” Ropke said. “The planned closure of the Jyväskylä site is an unfortunate, yet unavoidable measure. We must adjust our resources to reflect reduced market demand in order to maintain our competitiveness also in the future.”

 

According to Matti Huuhtanen of the Associated Press, Nokia shares fell 2 percent in Helsinki to close at about $11.25 after today’s announcement, which came as the industry bellwether continues to struggle with falling demand and handset prices.