Nokia resorted to job cuts to save on costs with 20% or 2,000 of its staff at its only plant in Salo, Finland to be axed over a 90 day period starting next year, reports Reuters. The plant in Salo is among the nine facilities of Nokia.

"In this market situation, taking into account usual seasonality, at this point we see no need for full capacity," said a company spokesperson to the news agency.

Nokia which till couple of years enjoyed unchallenged market leadership position in a market which was determined by market share in low-end and entry level market, has failed to keep pace in the smartphone segment, which is believed to be the future determinant of the handset market especially when it comes to profitability. 

The Salo plant ironically was into manufacturing advanced handsets. But it is no secret that manufacturing costs in European countries is very high as compared to manufacturing in Asian countries such as India and particularly China and Taiwan.

The current move is considered to be focused on cost savings to improve margins and thereby profitability.

Just last week, Swedish telecom gear manufacturer, Ericsson had announced close to 1,000 job cuts in its home country, Sweden.