Nokia on Tuesday said it will slash 1,700 jobs as part of a plan to match its support costs to decreasing handset sales.

The job cuts are part of the Finnish giant's previously announced plan to reduce its mobile device costs by more than $909 million by the end of 2010.

“If anything Nokia has been late to react to market changes, so this does not allow us to say whether things are getting better or worse,” said Matthew Thornton, telecom equipment analyst with Avian Securities.

Analysts will have to wait until Nokia, which accounts for 40 percent of the global handset market, releases its first quarter 2009 numbers. But they seem to have a good idea as to what is in store.

“People are expecting a very difficult quarter. The first quarter is always slow and when you add Nokia’s tendency to react slowly, expectations are very low,” Mr. Thornton said.

Nokia’s cuts will come from its device unit along with its corporate development, global support, and R&D divisions.

The company said the cuts will match its support functions to reductions it made in its product portfolio and cost cuts that resulted from its acquisition last year of the Symbian operating system. (Nokia Stalks Google with Free Symbian)

There is immense strain all across the wireless market as unexpectedly poor consumer demand for handsets has created a bulge in inventory throughout the industry.

Distributors, retailers, and carriers have practically stopped ordering handsets and handset makers in turn have cut back on component orders.

Researcher Strategy Analytics forecasts a 9 percent drop in the rate of growth in the market in 2009 while others have made projections as high as 15 percent. (4 Billion Served as Nokia Shrinks)

In January, Nokia adjusted its 2009 outlook for the industry to a 10 percent decline from a reduction of 5 percent forecast in December.