Business & Finance - Friday 11.4.2003
Nokia Networks to shed 1,800 jobs worldwide; majority of impact felt in Finland
Nokia engineers urged to refuse working overtime
Nokia Networks has announced that it will cut 1,100 jobs in the Helsinki region, Tampere, Oulu, and Jyväskylä. Over 500 research
and development engineers will lose their jobs, and some 300 positions from production will be cut.
Some 700 jobs will also be shed in other countries, or in the United States, Germany, and Italy. In addition to research and
development, the cuts will affect sales, marketing, and administrative personnel.
The dismissals could be expected, as Nokia warned in March that its network arm continues to suffer from the weak demand in
the global mobile network business, and that its operating income in the first quarter will be clearly negative. However,
the scope of the job cuts and their large effect on Finland came as a surprise.
- At the Nokia Networks R and D unit in Helsinki's Pitäjänmäki district, the expressions of engineers were grave after they heard the news. Shop stewards recommended
that engineers refuse to work overtime from now on as an answer to the planned dismissals. The employee representatives hope
that this might encourage Nokia to find other work for the employees within the group.
The shop stewards were also surprised that Nokia wants to cut back so much on its R and D personnel, as the future of the
company and its competitiveness depends on its internal product development.
Nokia Networks President Sari Baldauf gave an assurance that there will be no more dismissals within the network unit. She explained that Nokia would not abandon
any areas of mobile technology, but would sharpen its research and development focus.
Helsingin Sanomat has learned that Baldauf sought to avoid dismissals for as long as possible, but in February or March the Nokia management
decided that the measures would have to be carried out.
- On the Helsinki Exchanges, the Nokia share fell by nearly six percent on Thursday. However, the price had already fallen during Thursday's early trading
before the news of the dismissals was published. Although most investors believe the move was wise for Nokia, it did provide
a negative signal, as the company's network business may be in more trouble than investors have previously feared.
Thursday's announcement made Nokia the largest shedder of jobs in Finland since the recession of the early 1990s. Nokia Networks
currently employs 17,000, half of whom work in Finland. The majority of Nokia's research and development takes place in Finland.
Other recent dismissal announcements in the IT sector may make it difficult for all the affected Nokia employees to find new
Nokia will publish its interim figures for the first quarter of 2003 next Thursday.
- Previously in HS International Edition:
- Increasing difficulties in network market weighing on Nokia earnings (12.3.2003)
- Nokia Networks to trim 550 jobs from R and D (13.2.2003)
- Nokia press release
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