The company has carried out the Finnish style mandated talks with its staff. The reduction is to be carried out by 2018, Xinhua reported.
Nokia has 104,000 employees worldwide. Out of them some 7,000 are in Finland. Of the cutbacks now 500 will affect Espoo, the rest operations in Oulu and Tampere.
Nokia is adjusting its operations and staff worldwide following the takeover of Alcatel-Lucent. The company has a worldwide saving target of EUR 900 million (about $1 billion) in annual costs in synergy.
Earlier this week, Nokia said it had signed an exclusive 10-year licensing deal with Finnish company HMD Global Oy to create Nokia-branded phones and tablets.
Nokia said it will receive royalty payments from HMD for sales of Nokia-branded mobile products, covering both brand and intellectual property rights.
Once the world's biggest maker of mobile phones, Nokia was wrong footed by the rise of smartphones and eclipsed by Apple and Samsung. It sold its handset business to Microsoft in 2014.
It however held on to its phone patents and started to prepare a comeback by brand-licensing, although it has had to wait due to a non-compete deal with Microsoft.