Nokia,Sony Ericsson see recession lasting years

Nokia said it would cut production at its Finland plant as demand for cell phones has dropped.

Written by Reuters | Helsinki | Published: February 16, 2009 9:41:24 am

The global economic downturn will last some two to three years,and top mobile-phone maker Nokia may cut more jobs if conditions worsen,Nokia board Chairman Jorma Ollila said on Sunday.

Nokia on Wednesday said it would cut production at its Salo plant in Finland as demand for cell phones has dropped,and close a research site in the Finnish town of Jyvaskyla. It said 410 jobs in the company would go.

Asked by Finnish broadcaster YLE if Nokia planned additional temporary or permanent layoffs,especially in Finland,Ollila said: “Now we have to see… and if the situation gets clearly worse,it could very well be that we take more actions.”

“It’s a very difficult situation. This coming recession is far more difficult than how it looked a few months ago.” When asked how long he thought the recession would last,Ollila said: “Two to three years.”

Hideki Komiyama,president of the world’s fourth-largest cellphone vendor,Sony Ericsson,agreed that the trend could continue for a few years.

“This situation we see today is very,very unusual and very severe,” he told Reuters in an interview at Mobile World Congress in Barcelona.

“At this moment,when you think about the recovery in a global sense,I think it will take longer than a normal recession,” he added.

Cell-phone sales are set to drop this year,hit by consumers’ reluctance to spend on new gadgets in the midst of the economic recession and large inventories built up by phone sellers at the end of last year.

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