Nokia to cut 3,500 jobs before 2013

September 29, 2011
Shares

, HELSINKI, Sept 29 – Mobile phone giant Nokia said Thursday it was slashing 3,500 jobs in Romania, Germany and the United States, just months after announcing 4,000 job cuts it said would be the last for the foreseeable future.

“Nokia plans to close its manufacturing facilities in Cluj, Romania, by the end of 2011 … and plans to close its (locations and commerce development) operations in Bonn, Germany and Malvern, US,” by the end of next year, the Finnish company said in a statement.

These cuts are in addition to the 4,000 job cuts and 3,000 outsourced jobs the company announced in April as part of a massive restructuring effort.

The company also hinted at more job cuts next year, saying that it would review the long-term role of certain factories in Salo, Finland as well as plants in Hungary and Mexico.

The company said it expected to have more details “into the possible headcount impacts” at these sites in 2012.

Thursday’s announcement could indicate Nokia was thinking about shifting manufacturing to Asia, Pohjola Bank analyst Hannu Rauhala told AFP.

“If you think about where the markets are, the growth markets are in Asia, and it makes sense to manufacture a product close to the customer,” he said.

Chief executive Stephen Elop said in Thursday’s announcement the company was taking “painful yet necessary steps” to revamp the company in line with a radical restructuring plan.

The plan, announced in February, included abandoning the company’s Symbian smartphone platform, closing a number of sites globally, re-organising business and development units, and streamlining management.

When Elop revealed in April that these changes would result in 4,000 job cuts, he said the company had no plans to cut more jobs further down the line, adding this was the “full plan for as far as we can see into the future.”

That Nokia now, just five months later, is announcing another massive round of job cuts shows just how quickly the market is changing, Rauhala said.

“A lot of these factors have been a reality for some time, but it takes a while for the situation to heat up,” he said, pointing out that even if you put a pot of water on a hot flame, it “takes a while for the water to boil.”

Rauhala said Nokia, which is still the world’s largest mobile phone maker, is operating in a rapidly changing landscape, marked by Motorola’s leap into the Google camp by agreeing to make only Android phones and the rise of small local manufacturers aggressively claiming market share.

In addition to the job cuts, Nokia will next month transfer around 3,000 of its Symbian developers to US-based global firm Accenture, where they will continue to develop Symbian software for Nokia through 2016.

At the end of December 2010, before Elop’s restructuring announcement, Nokia employed around 60,000 people not including employees for Nokia Siemens Networks or NAVTEQ.

Nokia’s new strategy marks a radical effort to stop the haemmorrhaging of its market share to RIM’s Blackberry, Apple’s iPhone and handsets running Google’s Android platform.

The former undisputed world leader saw its market share fall to around 23 percent in the second quarter of this year, according to analysts, compared with a peak of 40 percent in the first half of 2008.

Shares

Latest Articles

Stock Market

Most Viewed