Nokia lays off more workers, opens up to third-party apps

Phone maker to cut another 450 employees, seek support from external developers

Nokia Corp. announced today that it will lay off another 450 employees in the wake of a 27% sales decline in this year's first quarter compared to the same period a year ago.

The Finland-based mobile phone maker, looking for ways to boost its sales while cutting internal costs, also said that it plans to open up the programming interfaces for some of its communications services in an attempt to take better advantage of third-party software developers.

The latest job cuts are related to the changes at the Nokia Services unit and also affect workers in Nokia's IT department and other corporate operations. They come on the heels of Nokia's first-quarter earnings report, which showed that the company sold 93.2 million phones in Q1 — a steep drop from the 113.1 million devices it sold during last year's fourth quarter.

Nokia has made a series of cutbacks as it grapples with falling sales fueled by the economic recession. The company announced in February that 320 employees would be laid off, then it said last month that it planned to cut another 1,700 workers.

The layoffs began with a 600-worker reduction announced last November, when Nokia predicted that worldwide handset sales would decline this year because of the economic downturn. Nokia's goal in making the various cuts is to lower its annual costs by €700 million ($910 million U.S.) by next year.

The interface changes announced today are designed to enable third-party developers do more with the vendor's services and devices, according to Nokia.

For example, Nokia will open up the API for its Ovi Share service, said Leslie Nakajima, a spokeswoman at its Nokia Services unit. Ovi Share lets users share content via PCs and mobile phones; an upcoming version of its API will let third-party developers add more ways to share photos and videos, Nakajima said.

Apple Inc.'s success with the iPhone application market, via its App Store, can be attributed to the fact that it opened up the technology to third parties, said Paolo Pescatore, an analyst at CCS Insight. And particularly in these tough economic times, it's probably prudent for phone makers and network operators to work more closely with external developers, he said.

The timing of the announcement about the API plans was no coincidence: the Nokia Developer Summit 2009 opened today in Monaco. According to Nakajima, third parties will also get a chance to try out a beta software developer's kit for the N97, an upcoming upgrade of Nokia's flagship smartphone. The SDK includes support for the phone's keyboard and home-screen widgets, she said.

In addition, the new plan aims to reduce duplication in Nokia's offerings. For example, she said there's no need for its different services to have their own payment systems, as they now do.

Also, mobile games will be available via a new online storefront called Ovi Store that Nokia plans to launch in May, in addition to their existing channels, the company said.

Copyright © 2009 IDG Communications, Inc.

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