Nokia trades 1,000 resignations for severance packages

In a move that echos struggling US wireless carrier Sprint (NYSE: S)’s Motorola (NYSE: MOT)’s bid to help stave off compulsory job cuts, the world’s largest mobile phone maker has announced plans to offer severance packages to the first 1,000 employees who volunteer to resign their posts. The resignation-for-severance trade is being offered as part of Nokia (NYSE: NOK)’s company-wide effort to cut costs to the tune of €700 million ($897 million) per year.

Nokia is also encouraging their workforce to take advantage of unpaid leave and sabbaticals, essentially giving employees a push to go on a non-paid vacation. The current round of job cuts and resignation incentives are part of Nokia’s “previously announced plans to increase cost-efficiency and adapt to the challenging market environment,” the company said in a statement on Tuesday.

The resignation compensation program will kick off on March 1, 2009. Employees can sign up for the program until 1,000 applicants have been pink-slipped or until May 31, 2009, whichever comes first.

It seems not even the mighty Nokia is immune to economic downturns. Nokia’s most recent quarter saw a 61% decline in operating profit, prompting the Finnish cellphone manufacturer to tighten its money-belt. When times get tough, the easiest way to cut costs is to cut your workforce. Unfortunately, we’ll be seeing some Nokia employees joining the ranks of tens of thousands of the newly unemployed.

[Via: Reuters]