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By David Meyer, 18 March 2009 08:18

NEWS

Nokia is to lay off approximately 1,700 staff around the globe, the handset manufacturer said on Tuesday.

The cuts follow a marked drop in profitability at Nokia which, like its rivals, is feeling the effects of the global economic downturn. In a statement, Nokia said staff would be laid off in its devices and markets units, as well as in its corporate-development office and global-support functions.

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A precise geographical breakdown of the cuts has not yet been announced but a Nokia spokesperson told silicon.com sister site ZDNet UK on Tuesday that 700 staff will go in the Finnish company's homeland. "The UK and the US have both been named as countries in which we have a considerable number of staff," the spokesperson said. "There will be redundancies in both countries."

Nokia employs around 128,000 people around the world, with 3,200 in the UK. The company's UK headquarters in Farnborough employs around 1,500 staff, with the rest spread around a services office in Bristol, and design and Symbian offices in London.

Nokia's spokesperson said the cuts were "focused on a scaling process", adding that "no specific groups or business units… are being shut down as a result of this announcement".

The company announced the closure of its Turku site in November in the wake of disappointing profits.

Carolina Milanesi, research director at analyst house Gartner, told ZDNet UK on Tuesday that the number of job cuts announced on Tuesday by Nokia was "obviously big… but not worrying, given the size of Nokia".

"In this current market, obviously cost is very important," Milanesi said. "Nokia has been very good at trying to limit costs as best they can."

Results from Gartner published last week showed that Nokia remained the number-one smartphone maker in the world, but its lead was slipping as rivals such as Apple, HTC and RIM gained market share in recent months.