Nokia closes R&D centre and lays off staff

Nokia is to close its Jyväskylä R&D site by the end of the year

Nokia has announced plans to reorganise its research and development operations, and lay off over 400 staff in an effort to adapt to the economic situation.

The Finnish phone giant said that it will gradually run down its Jyväskylä site, which deals mainly with mobile product development and marketing, before closing it entirely by the end of the year. All of the site's 320 employees are likely to lose their jobs.

Nokia said last month that it would have to begin cost cutting, as well as contemplate lay offs, after releasing disappointing financial results showing rapidly diminishing profits in the fourth quarter.

Peter Roepke, senior vice president at Nokia's Devices R&D unit, described the planned closure as "an unfortunate yet unavoidable measure".

"We must adjust our resources to reflect reduced market demand in order to maintain our competitiveness in the future," he said.

Nokia will now shift its Finland mobile devices R&D focus to Tampere, Oulu, Salo and the Helsinki metropolitan area. But the company warned that other sites still remain vulnerable.

Nokia has also said that it will "temporarily lay off" 20 to 30 per cent of the 2,500 employees at its Salo plant on a rotational basis so as not to interrupt the plant's operations, blaming lower demand for handsets.

Some 60 jobs are set to go from the firm's global support functions, and Nokia's new businesses entity will lose 30 employees.