Nokia Oyj, whose shares fell by almost half this year, plans to fire as many as 1,000 people at its network unit to lower costs as demand slows for mobile-phone equipment.
The biggest maker of cellular phones is reining in spending after halving its forecast for second-quarter sales growth to less than 10 percent. Nokia, also the No. 3 phone-equipment maker, announced plans in March to eliminate 400 jobs.
Network equipment sales are slowing as European phone companies reduce investments after spending US$100 billion on mobile-phone permits last year. Ericsson AB, the biggest maker of wireless networks, has said growth in that market will slow to between 5 and 15 percent this year from 20 to 25 percent in 2000.
"At the beginning of the year, the companies were preparing for growth -- now they are weathering a shrinkage," said Mika Heikkilae, who helps oversee 250 million euros (US$213 million) at Conventum Funds and owns Nokia shares.
The stock closed down 0.05 euros, or 0.2 percent, at 25.50.
Since Nokia reduced its sales and profit forecast on June 12, the shares have lost about a quarter of their value.
Thursday's losses will bring Nokia's announced job cuts this year to 2 percent of its 60,000 employees.
Rivals have announced plans to eliminate more than 70,000 workers this year. Motorola Inc has said it'll cut 26,000 employees. Nortel Networks Corp will eliminate 20,000 jobs and Lucent Technologies Inc of the US has slashed 16,000 workers.
Ericsson in March said it would eliminate 10,000 jobs.
Most of Nokia's job cuts will be made in marketing, sales and administration of the network unit, said Arja Suominen, a Nokia spokeswoman. About 200 jobs will be lost in Finland. The reductions don't include production and research and development staff, Suominen said.
It plans to find new jobs for some of them, Suominen said.
Half of the 400 employees Nokia said it would cut in March found other jobs in the company, she said.
The Finnish company, which last year controlled 32 percent of the mobile phone market, has boosted its market share since 1997, while the share of rivals Motorola and Ericsson shrank.
Still, Nokia may be hurt by slowing demand for handsets, which account for 70 percent of the company's sales. The Finnish company said on June 12 it expects "very modest" growth from last year, when 405 million mobile phones were sold. It had previously projected the industry would sell between 450 million and 500 million phones this year.
As a result, Nokia said second-quarter sales and profit would miss its projections.
"I expect more of these small job cuts from Nokia," said Petri Korpineva, an analyst at Evli Securities, adding that Nokia's cuts are likely to be smaller than those of rivals.
Nokia is expected to lower its outlook for the year when it reports second-quarter earnings July 19. The company two weeks ago said per-share earnings in the second quarter are expected to be 0.15 euros to 0.17 euros, down from 0.21 euros in the same quarter a year ago. It earlier predicted 0.20 euros.
So far, Nokia has been more successful than rivals in keeping costs under control. The network-equipment unit's operating margin -- or the percentage of sales left after production, sales and administrative costs -- was 18 percent in the first quarter of 2001, compared with 18.6 a year earlier.
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