Despite Microsoft pact,Nokia fades in race with rivals

“This reduction is expected to come from a variety of different sources and initiatives,” the company said,“including a reduction in the number of employees and normal personnel attrition,a reduction in the use of outsourced professionals,reductions in facility costs,and various improvements in efficiencies.”

Stephen Elop,the Microsoft executive whom Nokia hired to be chief executive last September,said the company would begin negotiations with its work force in Finland and elsewhere next week. Before those talks,Elop said Nokia will not speculate on the number of jobs it may eventually cut.

“Speculation on the exact numbers and the timing of those numbers is best postponed until we discuss this with” worker representatives,Elop said in a conference call with financial analysts.

Some employees will be able to move into other jobs with Nokia,Elop said,and Nokia may have openings as a result of its partnership with Microsoft. Because of those opportunities,Nokia said it could guarantee employment to its existing employees through this year.

Nokia also confirmed that it had signed an agreement with Microsoft to obtain the Windows operating system for Nokia’s smartphones. The two companies announced the partnership on February 11. Since then,Nokia’s stock price has fallen by about a third. The cost-cutting initiative came as Nokia lost its lead in cellphone revenue to Apple,the research firm Strategy Analytics said on Thursday.

Nokia’s phone revenue fell to $9.4 billion in the last quarter,while Apple’s revenue from the iPhone increased to $11.9 billion,the research firm said.

“With strong volumes and high wholesale prices,the PC vendor has successfully captured revenue leadership of the total handset market in less than four years,” Alex Spektor,an analyst,said. Nokia also reported Thursday that its profit fell slightly,to euro 344 million ($497 million) in the first quarter from euro 349 million ($504 million) in the period a year earlier.

Sales rose 9.2%,to euro 10.4 billion ($15.0 billion),in large part because of gains in Latin America and China,where Nokia’s sales rose 29% and 30% respectively. Sales in North America fell 36%,and sales in Europe fell 5%.

Nokia said its sales of smartphones rose 13% in the quarter,to 24.2 million units from 21.5 million. The market grew 74% over all during the same time,Francisco Jeronimo,an analyst with the International Data Corporation in London,said.

On top of that,the average selling price fell 6% in the same period,to euro147 from euro 155 a year earlier,Nokia said. The company said it had sold 108.5 million cellphones of all types during the quarter,1% more than a year ago. Yet its global share of the cellphone market fell to 32% from 34% a year ago,according to IDC.