Another 3,500 jobs go as Nokia seeks €1bn cuts

Nokia's latest attempt to douse the flames threatening to engulf it will see a further 3,500 jobs axed this year, with the threat of more in 2012. It has also closed one factory and put a further three under review.

The beleaguered Finnish mobile phone giant revealed the news yesterday as part of its drive to slash €1bn out of the business over the next two years. This brings the total number of job cuts announced this year to 7,500, with a further 3,000 moving to Accenture.

Stephen Elop, Nokia's chief executive, said: "We must take painful, yet necessary, steps to align our workforce and operations with our path forward." He added that the company would emerge more "dynamic, nimble and efficient".

The cuts announced earlier in the year focused on its research and development operations in the mobile phone and smart devices division. Yesterday's announcement marked the "next phase" of the cuts, the company said, "which includes plans for reductions in manufacturing, the location and commerce business and supporting functions".

It is overhauling its manufacturing operations to focus on making its feature phones nearer to its crucial markets and suppliers. "As a result, Nokia plans to close the manufacturing facility in Cluj, Romania, by the end of 2011," the statement said, adding it would concentrate on its production in Asia.

The factories in Salo, Finland, as well as Komarom in Hungary and Reynosa in Mexico are now being reviewed. "These factories are expected to continue to play a key role in serving European and North American smartphone customers," Nokia said, adding they would shift the focus to software and sales pages.

"It is estimated this would have an impact on the number of personnel in 2012, with no impact in 2011," Nokia added, saying it would have a clearer idea of the job cuts at the beginning of next year.

The location and commerce business, which includes Nokia's social location services and mapping business, is to close operations in Bonn in Germany and Malvern in the US.

Nokia said the measures "support both the execution of the company's strategy and the savings target the company announced earlier this year, and also target to bring efficiencies and speed to the organisation".

Nokia's chief executive famously equated the company to a burning man on a platform. Since then he has taken dramatic steps to turn around the company's fortunes, including the cost cutting drive and a tie-up with Microsoft over smartphones.