Pro's Antti Rinne said that Nokia is expected to announce layoffs in the R&D department by the end of this month, potentially cutting 6,000 jobs, which is equivalent to 38% of the Finnish company’s global equipment R&D staff. Nokia declined to comment on the number of layoffs.
On February 11th, Nokia CEO Stephen Elop said that Nokia's smart phone main operating system will use Microsoft's Windows Phone 7 in the next two years, which may trigger a "substantial reduction of employees." When Nokia phased out the self-developed Symbian and MeeGo systems, the workers did not have to defend what the job might be.
Keller Kyrie, an engineer at Tampere Research and Development Center, said: “This does not bring about an effective or innovative work environment. This kind of waiting is expensive. We have carried out a R&D and reorganization in 2009, and the normal operation of the department began. At the time, the Symbian reorganization began in the second half of 2010."
Nokia's equipment R&D budget for 2010 is 3 billion euros (about 4.3 billion U.S. dollars), which includes a large number of products ranging from basic feature phones to smart phones. Its device R&D budget is 2 times that of Apple’s total R&D budget of 1.78 billion U.S. dollars.
Gartner said that from Apple’s launch of the iPhone in 2007 to the fourth quarter of 2010, Nokia’s share in the smartphone market has dropped by 20% to 30.8%. As of the end of last year, the total number of Nokia's equipment and services was 16,134.
Michael Schroeder, an analyst at FIM Bank in Helsinki, stated: “The layoffs may be gradually implemented in the next 12 months because there are still some unfinished developments in the Symbian pipeline. It is expected that one-third of R&D may be cut during the transition period. Spending, according to the 2010 budget, can save 1 billion euros."
Nokia said that the transition period will continue until 2012. According to Finnish law, companies must negotiate with trade unions before layoffs. This negotiation usually takes about six weeks. Nokia will release its financial report on April 21 and hold the annual general meeting of shareholders on May 3.
According to regulatory documents, Nokia, including Nokia, has approximately 21,000 employees in Finland, which accounts for 16% of its global workforce. This figure also includes about 2,000 employees at the Salo smartphone factory.
In November 2009, Nosi announced layoffs of 5,760 people. The joint venture company was established in 2007 with 60,000 people, and has now laid down 15% of its staff. In 2008, Nokia shut down its mobile phone factory in Bochum, Germany, and cut about 2,300 people. In March 2009, Nokia announced the layoff of 1,700 people in sales, marketing and management departments.
According to the annual report submitted by Nokia, the number of employees in the company fell by 31% from 1990 to 1993, when the rubber products and computer division were closed. The number of employees in the mobile phone division has more than doubled since 1999 and reached 50,000 8,642 at the end of last year.
In September 2010, Elop announced that it had cut 1,800 people in areas such as Symbian smartphones. Paivyt Tallqvist, a Nokia spokeswoman, said: "We plan to announce the number of layoffs in the last week of April." The layoffs will not be limited to Finland. The plan also includes negotiations with union representatives.
According to Bloomberg, Finland’s largest private-sector white-collar union, Pro, believes that due to Nokia’s cooperation with Microsoft in the mobile operating system, Nokia is likely to lay off its staff for the most part in 20 years, for which the workers are actively resisting.