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Nokia streamlines ops, loses Nortel bid

Posted: 26 Nov 2009 ?? ?Print Version ?Bookmark and Share

Keywords:Nokia Nortel deal? job cut? R&D?

Nokia Inc. has recently cut jobs in Denmark, Japan and Finland, and has lost a bid for part of Nortel's assets.

In another move to cut costs, Nokia on Tuesday (Nov. 24) said that it will be reducing its R&D activities in Japan. The cellphone giant will cut about 220 employees in Japan. The total number would represent slightly more than 1 percent of Nokia's R&D personnel globally.

Nokia will continue its sourcing activities in Japan. The Japanese operation of Nokia Siemens Networks, Nokia's network infrastructure business, is not affected by this announcement.

This week, Nokia Siemens Networks also suffered a blow. Nokia Siemens Networks confirmed that, with its financial partner, it did not submit the highest bid for Nortel's optical networking and carrier Ethernet assets in the bankruptcy court-sanctioned auction.

It lost the bid to Ciena Corp., which has been selected as the successful bidder in the auction of substantially all of the optical networking and carrier Ethernet assets of Nortel's Metro Ethernet Networks business. Ciena agreed to pay $530 million in cash and issue $239 million in aggregate principal amount of 6 percent Senior Convertible notes due 2017 for a total consideration of $769 million for the assets.

Meanwhile, Nokia Siemens is also conducting a global personnel review which may lead to headcount reductions in the range of about 7-9 percent of its current approximately 64,000 employees.

Not to be outdone, as previously announced last week, Nokia itself plans to reduce some of its R&D activities in Finland and Denmark. The cuts are expected to affect up to 230 employees at Nokia's Oulu site in Finland and approximately 100 employees at Nokia's Copenhagen site. The total number would represent approximately 2 percent of Nokia's R&D personnel globally.

Also this month, Nokia initiated a charger exchange program. Nokia identified a potential product quality issue with certain chargers manufactured by one of its third-party suppliers. The plastic covers of the affected chargers could come loose and separate, exposing the charger's internal components and potentially posing an electrical shock hazard if certain internal components are touched while the charger is plugged into a live socket.

To accelerate what executives have termed the need for a "cultural" change at the company, Nokia last month moved chief financial officer Rick Simonson to head the mobile phones unit and charged him with the task of handling "strategic sourcing" for the entire devices division. Timo Ihamuotila, head of global sales, was appointed to replace Simonson in the chief financial officer role.

- Mark LaPedus
EE Times

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