UPDATE 2-Nokia says to cut 4,000 more jobs

Wed Feb 8, 2012 4:04am EST

* To cut assembly jobs in Finland, Hungary, Mexico

* Moves smartphone assembly to Asia

* Shares 1.3 pct higher

By Tarmo Virki, European Technology Correspondent

HELSINKI, Feb 8 (Reuters) - Struggling Finnish phone maker Nokia plans to cut 4,000 more jobs at its plants in Finland, Hungary and Mexico as it seeks to cut costs by moving smartphone assembly work to Asia.

The cuts of 8 percent of the phone business workforce, bring total planned job cuts at the group under Chief Executive Stephen Elop to more than 30,000.

Nokia said in a statement the job cuts would take place in phases through this year. It has been reviewing the operations since unveiling the closure of its Romania plant last September.

"This was inevitable. It was a surprise it took so long for the decision to be made," said Steve Brazier, chief executive of technology research firm Canalys.

Nokia's Finnish factory in Salo, which was the cornerstone for its success in 1990s, has long been the last phone assembly plant in the Western Europe as most rivals have moved their production to Asia.

"Stephen Elop may be a polarising figure, but he is proving effective at driving the change and he should be credited for that," Brazier said.

Nokia said it would cut 2,300 jobs in Hungary, some 1,000 jobs in Finland and remaining jobs in Mexico.

On Jan. 26 Nokia reported a 73 percent fall in fourth-quarter earnings after sales of its new Windows Phones failed to dent the dominance of Apple Inc's iPhone or compensate for diving sales of its own old smartphones.

Its smartphone sales shrank 31 percent from a year ago and the business made a steep loss for the quarter.

Nokia announced in April last year it would cut 7,000 jobs and unveiled a further 3,500 job losses in September. Its network arm Nokia Siemens announced cuts of 17,000 in November.

The group had 130,000 staff at the end of 2011, including Nokia Siemens.

Shares in Nokia were 1.3 percent higher at 3.934 euros, slightly outperforming the technology share index which rose 0.6 percent, by 0900 GMT.

"It was well in line with Nokia's previous comments," said Pohjola analyst Hannu Rauhala. "Now they just specified the number of job cuts."

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