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Shakeup at Nokia: It's laying off 4,000, moving work to Asia

Roy Harris | Feb. 9, 2012
Nokia is moving more of its manufacturing to Asia, the company says, and it is laying off about 4,000 workers by year-end at three factories in Europe and Mexico.

Nokia is moving more of its manufacturing to Asia, the company says, and it is laying off about 4,000 workers by year-end at three factories in Europe and Mexico.

Currently, the affected factories in Komarom, Hungary; Reynosa, Mexico; and Salo, Finland, employ a total of 8,900. Nokia had said in September that it was reviewing operations at the three factories. At the time, it said it was closing a Cluj, Romania, factory. It noted that the company's Asian factories provided greater scale and proximity to component manufacturers.

Nokia aims to become more competitive by moving its phone manufacturing to Asia. The company is ramping up the roll-out of smartphones based on Windows Phone, while the sale of Symbian-based smartphones is dropping faster than expected.

The company left it to Niklas Savander, Nokia executive vice president, markets, to explain the changes. "With the planned changes, our factories at Komarom, Reynosa and Salo will continue to play an important role serving our smartphone customers," he said. "They give us a unique ability to both provide customization and be more responsive to customer needs."

He added: "Shifting device assembly to Asia is targeted at improving our time to market. By working more closely with our suppliers, we believe that we will be able to introduce innovations into the market more quickly and ultimately be more competitive. We recognize the planned changes are difficult for our employees and we are committed to supporting our personnel and their local communities during the transition."

The company plans to increase the rate at which Windows Phone-based Lumia smartphones become available in new markets and the pace at which new models are launched, Nokia CEO Stephen Elop said during a conference call following the release of the company's fourth quarter financial results.

The employees that survive the cuts will work on "smartphone product customization," according to Nokia. The customization could include tailoring the software of smaller batches of phones for an operator, a spokeswoman at Nokia said.

For the fourth quarter, Nokia reported sales of €10 billion ($13.3 billion), down 21% from a year-ago, and a net loss of €1.07 billion, compared to a net profit of €745 million a year earlier.

Like many competitors, Nokia is now getting ready for Mobile World Congress in Barcelona. The company has scheduled a news conference for Feb. 27.

 

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