Nokia slashes another 3,500 jobs as cost cuts continue

Ailing mobile manufacturer Nokia is to cut a further 3,500 staff as part of an ongoing strategy to reduce costs and streamline the business.

The company confirmed that it will close location services divisions in Bonn in Germany and Malvern in the US with the loss of 1,300 jobs.

Some 2,200 employees at a plant in the Romanian city of Cluj will also be laid off by the end of the year, as factories in Asia can provide Nokia with greater scale and shorter transport links to key markets.

The cuts come just six months after Nokia announced 4,000 redundancies across the company.

Nokia chief executive Stephen Elop insisted that the vendor has to continue with this cost-cutting strategy, and that it is reaping benefits.

"We are seeing solid progress against our strategy and, with these planned changes, we will emerge as a more dynamic, nimble and efficient challenger," he said.

"We must take painful, yet necessary, steps to align our workforce and operations with our path forward."

Craig Cartier, an analyst at Frost & Sullivan, suggested that the cuts make sense as Nokia is using Windows Phone 7 for its software needs. But he warned that Microsoft is clearly not prioritising Nokia in its own struggle for market share.

"While Nokia has put its eggs in the Microsoft basket, its Redmond-based partner has not returned the favour. Microsoft has not slowed down to wait for Nokia," he said.

"Just two weeks ago US mobile carrier AT&T announced its launch partners - HTC and Samsung - for the Mango release of Windows Phone 7. Nokia was noticeably absent from that list."

Cartier added that this raises questions about when Nokia will bring its first devices to market, and whether more cuts will be imposed on the firm's workforce.

"This development brings into question whether the former leading phone manufacturer can, as promised, bring Windows Phone devices to market before the critical holiday sales period of 2011," he said.

"If not, this announcement might not be the last of the job cuts we hear from [Nokia worldwide headquarters] Espoo."