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Nokia set to axe 10,000 workers worldwide in costs drive

NOKIA has announced it will lay off 10,000 workers worldwide by the end of 2013 in a further drive to save costs.

The Finnish mobile phone maker said it aims to return the company to profitable growth by sharpening strategy and improving its operating model.

Although it plans "to significantly reduce its operating expenses," Nokia said it remains focused on its smartphones and feature phones and intends to expand location-based services.

The cuts mean that Nokia will close some research and development projects, including in Ulm, Germany, and Burnaby, Canada.

The company said it will also close the manufacturing plant in Salo, Finland, but will keep its research and development operations there.

Nokia is fighting fierce competition from Apple's iPhone and other makers using Google's popular Android software, including Samsung and HTC of Taiwan. It is also being squeezed at the low end of the market by Asian manufacturers making cheaper phones, such as China's ZTE.

Nokia said that "competitive industry dynamics" in the second quarter would hit its smartphone sector to a "somewhat greater extent than previously expected" and that no improvement was expected in the third quarter.

"Nokia is significantly increasing its cost reduction target for devices and services in support of the streamlined strategy announced today," said spokesman Timo Ihamuotila.

"With these planned actions, we believe our devices (and) services business has a clear path to profitability. Nokia intends to maintain its strong financial position while proceeding aggressively with actions aimed at creating shareholder value."

Last year, Nokia announced more than 10,000 lay-offs, aimed at cutting operating expenses.