UPDATED 12:39 EDT / NOVEMBER 23 2011

Nokia Faces Layoffs as Microsoft Deal Strengthens

Nokia’s gone through some major changes in the past year, and some of those changes are catching up with the troubled phone maker.  They announced their plan to cut around 23 percent of its total workforce today, highlighting the downside of how Nokia’s been affected by the mobile industry’s shift.  The company is taking this step to strengthen its profits in a stagnating market for network gear.  This will include laying off almost 17,000 employees out of its current 74,000, transitioning through 2013.

The company has designed this layoff process as a part of its strategy of refocusing Nokia on mobile broadband equipment, the fastest growing segment of the market. Rajeev Suri, the Nokia Siemens chief executive says,

“This reduction would help the company trim annual operating expenses by €1 billion, or $1.35 billion, by the end of 2013 from its level at the end of this year. As we look towards the prospect of an independent future, we need to take action now to improve our profitability and cash generation. These planned reductions are regrettable but necessary. It is our goal to make them in a fair and responsible way, providing the support we can to employees and communities.”

Nokia Siemens had been facing losses from the past two years, but started performing well from the consecutive five quarters. To keep up with this growth, the company has decided to eliminate the jobs, most of them from Germany and Finland.

Nokia is also shifting its focus within mobile realm, teaming up with Microsoft to empower its devices. Together with Microsoft, Nokia is taking the next big step in helping out Symbian developers to create applications within the Windows Phone platform. They are also hiring the services of ST-Ericsson to supply them with a new chipset.

Nokia’s not the only mobile company facing job-related issues.  While AT&T promises a merger with T-Mobile will be good for job growth in the U.S., the FCC has its own concerns.  


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