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Nokia cuts back on R&D

The world's top handset maker will close a California research and development center while reducing the number of employees at other sites.

Nokia is laying off 550 employees in its network equipment-making division because of a "reduced need for hardware R&D work," the handset maker announced Wednesday.

All the cutbacks affect research and development centers run by Nokia Networks, the Nokia unit developing and manufacturing cell phone and landline network equipment, according to Nokia. The staff reductions are already taking place, a representative said.

"Through these changes, Nokia Networks will ensure a strong R&D focus on its core technologies, and improve its overall competitiveness," the company said in a statement.

Like the rest of the telecommunications industry, Nokia isn't expecting much growth in the cell phone market this year. In late January, Nokia warned of already slowing sales and profits because buyers were still holding back on spending.

The world's No. 1 handset maker said it will close a Santa Rosa, Calif., broadband research center and discontinue all research projects at a Kista, Sweden, office.

Nokia also plans to reduce the number of employees at a United Kingdom research center and is investigating similar cutbacks at a nearby center, the handset maker said.

Nokia employed 51,748 people at the end of last year. Nokia Networks employed about 17,000 people.