Nokia Networks, the infrastructure arm of the Helsinki, Finland, company, will cut 1,800 jobs and reduce its product lines.

In what amounts to a scaling back of its infrastructure business, Nokia said it would cut some R&D jobs and reduce the number of programs and products it supports within the division.

"The focusing of R&D includes a review of costs, scope, timing and number of programs and reducing the number of product configurations in light of the current customer and business situation," the company said in a statement.

"The target is to ensure the market, product and architectural leadership position in the GSM, EDGE and WCDMA markets while further increasing the focus and efficiency of R&D activities."

The company also reiterated that it expects to post a substantial loss for the first quarter despite the advances it continues to make in the mobile handset business where it has increased its market share to 38%.

Nokia Networks will eliminate 1,100 jobs in Finland and 700 at other worldwide locations, with the reduction spread across all departments, including R&D, operations, sales and marketing and support functions.

The company did not state the amount of restructuring charges it expects to take in the first quarter as a result of the actions announced today, although analysts said it could be substantial.

"Investors should brace themselves for significant restructuring charges which should allow Nokia Networks to break-even on the current level of revenue, last seen four years ago in first quarter 1999," said Alexandre Peterc, an analyst at Exane Equity Research, Paris, France, in a report released before Nokia's announcement.

In the fourth quarter, Nokia Networks accounted for approximately 24% of Nokia's $9.6 billion sales with the wireless division contributing 76%.

By: DocMemory
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