Major cost cuts are the order of the day for the Fins as axes thousands of staff. Nokia are close factory in in Cluj, Romania by the end of 2011, which will hit an “estimated” to 2,200 employees, it said yesterday.
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| Nokia N9, one of its latest releases here. |
Another 1,300 employees will go at its mapping division, which includes NAVTEQ, purchased in 2007 for $8.1bn.
This come as Nokia’s high-volume Asian factories “provide greater scale and proximity benefits.” Recently, the giant’s Indian plant, one of its biggest landed in hot water, having been accusing of paying staff below average wages.
The layoffs will take effect in 2012, CEO Stephen Elop confirmed. Other support operatins jobs will also go including Sales, Marketing and Corporate Functions, as previously announced.
The cuts are part of $1 billion savings Nokia, once the darling of the phones market, are looking to make as it refocuses is efforts on high end smartphones like N9 (pictured), as it battles out against stiff competition from the likes of iPhone 4 as well as Android’s Samsung and HTC.
The cuts aim to bring “efficiences and speed” to help pull it out of the black hole that was the 368m euros net loss it delivered in the second quarter, while net sales slid 7% to 9.3bn euros.
But even more worryingly, it is also looking to slash operations on native soil Finland as well as reviewing the long-term role of its manufacturing ops in Salo, Komarom, Hungary, and Reynosa, Mexico.
It also said it plans to focus its “feature phone manufacturing on those locations with optimal proximity to suppliers and markets” and “gradually shift focus to customer and market-specific software and sales package customization.”
These changes will take effect in 2012.
Elop plans to consolidate ‘location and commerce’ assets including NAVTEQ, closing operations in Germany and Malvern, US.
“We are seeing solid progress against our strategy, and with these planned changes we will emerge as a more dynamic, nimble and efficient challenger,” said Stephen Elop, Nokia President and CEO.
“We must take painful, yet necessary, steps to align our workforce and operations with our path forward.”
However, Elop moved to reassure its biggest market, Europe, that it was still staying local.
“Europe is core to Nokia’s future. In addition to our headquarters, we have a strong R&D presence in Europe.”
The staff reductions are expected to take effect by the end of next year.
“Nokia remains committed to supporting its employees and the local communities through this difficult change. “
