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Yahoo, Nokia Ditching Staff–How the Mighty Are Falling

Nokia is about to ditch 800 staff in its homeland Finland, just as Yahoo is firing around 700. Both big names are suffering from the success of competitors.

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Nokia is about to ditch 800 staff in its homeland Finland, just as Yahoo is firing about 700 staff. Both big-name companies are suffering from the success of some even bigger names — Apple and Google.

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Nokia’s losses will happen in Finland, starting in January, and will come with severance packages of up to 15 months of salary. Though some employees will be relocated inside the cell phone giant, this is a grim step for a company that announced 1,800 job losses in October. Nokia reports that it had about 123,000 employees at the end of 2009, so the loss is only about 2% of the company–but it still demonstrates that Nokia has an urgent need to trim spending. That’s despite it being the largest cell phone vendor, by volume, in the world. 

The reasons for this are many and complex, and we’ve delved into them before. One explanation is the other piece of Nokia news that hit today: the company is delaying its E7 phone, seen as its boldest iPhone challenger yet, until early 2011. This will mean Nokia misses out on the lucrative holiday shopping period.

Yahoo is also cutting staff–many will be getting their notice today. Their numbers come mainly from its U.S. product group. The layoffs were first reported a month ago, but they’re happening for one main reason: Yahoo needs to cut costs to meet its financial targets for the end of this year.

This could be interpreted in a number of ways. Yahoo may have budgeted very badly, or suffered bad luck in the marketplace. But you don’t shed 5% of your workforce in one swoop if you haven’t got something wrong. Considering the extraordinarily high rate of executive turnover, and hints that Yahoo isn’t growing its search and advertising revenues, things don’t look particularly sunny in Sunnyvale.

Can we point fingers at competitors that may be the reason behind both these giant’s troubles? It’s Google and Apple in Nokia’s case, and mainly Google in Yahoo’s case.

To read more news on this, and similar stuff, keep up with my updates by following me, Kit Eaton, on Twitter.

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I'm covering the science/tech/generally-exciting-and-innovative beat for Fast Company. Follow me on Twitter, or Google+ and you'll hear tons of interesting stuff, I promise.

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