Nokia To Cut Hundreds Of JobsNokia To Cut Hundreds Of Jobs

Because of a slowing global economic climate, the world's largest cell phone manufacturing company said Tuesday it would reduce its workforce by nearly 600 employees.

Nokia's restructuring effort will cut about 450 jobs in production, sales, and marketing. The company also will reduce the headcount at its main research center by about 130. Additionally, Nokia will close its Turku site in Finland and relocate those activities.

"Today's changes are part of Nokia's constant renewal where it is important to be close to our customers and ensure that our people are able to focus on the key business priorities," said Juha Akras, Nokia's senior VP of human resources, in a statement. "Also, our aim is to find alternative work within Nokia for as many employees as possible."

The company is still the global leader in the cell phone market by a wide margin, but it saw a decrease in market share and a 30% dip in net income last quarter. The drop was not unexpected, as the company warned it may lose market share in certain areas because it did not want to engage in price slashing.

Overall, the company remains optimistic about the mobile industry this year, and it expects cell phone volume shipments to be up sequentially for the fourth quarter. It also expects smartphone shipments to increase, and it's well-prepared to capitalize with the upcoming release of the touch-screen 5800 XpressMusic, as well as its N and E Series of handsets.

Nokia is not the only cell phone company that's reducing forces. As part of an effort to stem the losses in Motorola's handset division, co-CEO Sanjay Jha recently announced his company would cut 3,000 jobs. Sony Ericsson also has been hit hard by sluggish demand for high-end smartphones and said it would cut 2,000 jobs to save $474 million annually.