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Nokia in deal with IBM, plans layoffs in digital TV

Nokia will outsource some computer operations to IBM in a US$250 million deal, and said it will lay off 140 people because of an unprofitable digital TV receiver business.

The five-year contract with the world's largest IT services provider means IBM will run Nokia's helpdesk unit that advises computer users, and will help develop the mobile phone maker's computer desktop services, Nokia said yesterday.

"This deal with IBM will give us access to their latest technology and services, and in this way we will be able to improve our services and our efficiency," said Tapani Kaskinen, a Nokia spokesman. "We also want to focus on our core business."

The world's largest mobile phone maker also said it will streamline its digital television receiver operations because of weak markets, forcing it to cut jobs by 140, mainly in Finland.

"The global digital TV market has developed substantially slower than expected. The market is affected by technology fragmentation and heavy price competition resulting in an unprofitable business model," Nokia said.

Nokia, whose mobile phone sales account for 80 percent of total revenue has focused increasingly on the handset market.
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