Jun 28, 2001 12:00 PM,

Nokia Networks to cut as many as 1,000 jobs

Glenn Bischoff

Nokia Networks, the infrastructure division of wireless handset manufacturer Nokia, plans to cut 900 to 1,000 jobs globally as part of an effort to make the company more competitive and efficient in the infrastructure and network management space.

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“This is about maintaining our cost leadership and strengthening our connection to our direct customer interface,” said a company spokeswoman.

The spokeswoman said the restructuring “will touch as many as half” of the infrastructure division’s 23,000 employees. Beyond the job cuts, some employees will be transitioned into other jobs or will have their duties redefined, she said.

No definitive plans have been established for the job cuts, but the spokeswoman indicated they likely will begin after Labor Day and conclude sometime near the end of the year. She said the layoffs will affect the division’s operations across the board, but management had yet to indicate how specific regions and divisions would be affected. However, the spokeswoman said the cuts would come primarily from sectors such as account management and marketing, with some technology groups being affected.

The news came as no surprise to Jeffrey A. Schlesinger, an analyst with UBS Warburg. In a report issued today, he said the announcement was “generally expected in light of the weakness in the mobile infrastructure market and the prospect for continued weakness in 2002.” Specifically, Schlesinger said the job cuts are “in response to a weakness in the GSM infrastructure market and delays in deployment of 3G equipment.”

The Nokia spokeswoman acknowledged that the restructuring is designed in part to “prepare us for an expected 3G rollout next year in Europe,” and to ready the company for sporadic rollouts in the U.S. beginning next year and continuing to full-scale rollouts by 2004.

The UBS Warburg report said mobile infrastructure would continue to be “an important growth market for Nokia” and that it expects Nokia Networks to account for 24% of Nokia’s total sales in 2002.