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1/15/2008
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Nokia Cuts Jobs, Sprint Expected To Do The Same

Nokia said it will layoff 2,300 employees at its German production plant, while the Wall Street Journal said Sprint is planning extensive layoffs.

Job cuts at both wireless service provider Sprint Nextel and mobile phone maker Nokia are looming as competition in the mobile phone business gets more intense.

Nokia announced Tuesday that it will layoff 2,300 employees at its German production plant, while the Wall Street Journal said Sprint is planning extensive layoffs.

At the same time, rumors resurfaced that Sprint is considering returning its headquarters to Overland Park, Kan. The firm's new chief executive officer Dan Hesse has been working and living in Kansas, and Sprint's longtime employees there have been agitating for the headquarters to be moved back there from Reston, Va. The headquarters was moved to Reston after Sprint acquired Nextel. Sprint laid off 5,000 employees last January.

Sprint has been racked with turmoil since the merger as the two firms incompatible networks haven't melded easily. In addition Sprint's $5 billion bet on Mobile WiMax -- a still largely unproven technology -- has complicated the firm's future as it also struggles to deploy advanced CDMA2000 EV-DO wireless technology at the same time.

A Sprint spokesman said the company won't comment on "rumors and speculation when asked about the reports of pending layoffs and a return of the headquarters to Kansas.

While Sprint is dealing with reports of layoffs, as well as takeovers and mergers, Nokia was precise in its announcement that it will close its Bochum, Germany, plant and layoff 2,300 jobs there. "The planned closure of the Bochum production site is necessary to secure Nokia's long-term competitiveness," said Nokia's Veli Sundbaeck, in a statement. "It cannot be operated in a way that meets the requirements for global cost efficiency and for flexible capacity growth." Sundbaeck is Nokia's head of corporate relations and responsibility.

Nokia has been expanding operations in Romania and South Korea, which are expected to make up for some of the production lost by the closing of the German plant. Nokia's sales and profits have been soaring, and the company's market share in mobile phone handsets is more than its next three competitors combined. The company recently reported an 85% jump in profits. Still, the job cuts are an indication of the growing competition in the marketplace as the major mobile phone players jockey to catch the latest handset and service wave.

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