Nokia Cuts R&D Staff in Response to Sales Slump

Nokia is closing its R&D site in Jyväskylä, Finland. In the process about 320 employees will be laid off. The company is also making temporary cuts at its production facility in Salo, it announced on Wednesday.

Falling phone sales are forcing Nokia to make the cuts, the company said. Nokia reported fourth-quarter sales down about 19 percent year on year. The company also sold fewer phones: 113.1 million, 15 percent fewer than it sold a year earlier, and also lower than the 117.8 million it sold during the third quarter.

The Jyväskylä site, in a university town in central Finland, works on mobile device product development and marketing, but the company would not give more details. It will be closed by the end of the year, and Nokia now plans to concentrate its mobile device R&D in Finland at four other sites: Tampere, Oulu, Salo and the Helsinki metropolitan area.

Nokia will also temporarily lay off some manufacturing staff in Salo making devices such as the company's Nseries multimedia phones and Eseries business phones. It plans to lay off 20 percent to 30 percent of the 2,500 employees there on a rotational basis, for periods up to 90 days, according to a spokeswoman.

Other cuts will affect 60 employees in global support functions and 30 employees in the New Businesses entity in Services, Nokia said.

Nokia, like other vendors in the sector, aims to lower its costs -- in Nokia's case by more than €700 million (US$900 million) by 2010. To meet the target Nokia will continue to look at all of its activities to see where it can save money, according to a spokeswoman.