Mobile phone maker Nokia to cut 4,000 jobs

Nokia said almost 4,000 of its staff could lose their jobs as it announced additional restructuring plans.

Workers in Hungary, Mexico and Finland will be eased out and all devise assembly jobs will be moved to its factories in Asia to cut costs said a company statement on Wednesday.
"With the planned changes, our factories at Komarom, Reynosa and Salo will continue to play an important role serving our smartphone customers. They give us a unique ability to both provide customisation and be more responsive to customer needs," said NiklasSavander, Nokia executive vice president, Markets.

The company does not plan to completely shut down the three factories. The facilities will be utilized on smartphone product customization, serving customers mainly in Europe and the Americas. 

“Personnel reductions are planned to be phased through the end of 2012. Nokia will offer a comprehensive locally-tailored support program, including financial support and assistance with local re-employment,” the statement added.

According to the company the measures follow a review of smartphone manufacturing operations announced last September and aim to increase the company's competitiveness in the diverse global mobile device market.

"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," said Savander. "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."

Last year Nokia announced that it would be dumping its own Symbian platform and announced a tie up with Microsoft Corp to bring out all new models using Windows. It has already released two new models - Lumia 710 and 800 - that uses the Windows platform and plans are on to soon release two additional models.

2011 has been an year of drastic job cuts at Nokia. In April it outsourced its symbian software development that affected about 7000 jobs, in September it again announced that an additional another 3500 job cuts following the closure of its factory in Romania and reorganize its map business. In November Nokia Siemens Networks said it would cut 23 per cent of its workforce, about 17,000 jobs from its 74,000- workforce, enabling it to reduce costs by some 1bn euros.

But what is the road ahead for Nokia?

Although Nokia continued to maintain its number one position as the world's biggest mobile phone vendor in both the fourth quarter and the whole of 2011 its growth percentage has been falling sharply. Nokia’s handset sales fell by 7.9 per cent. Other players such as Samsung and Apple have had significant increases in sales compared to Nokia.

Additionally the two new Lumia phones, although registering a sale of 1million plus units, has still not managed to go any great wonders for Nokia. According to reports the fourth quarter saw Nokia selling just 19.6 million smartphones – a drop of 31 per cent compared to 2010. During the same period Apple sold 37million units followed by 36.5million units by Samsung.

Nokia registered a net loss of 1.2 billion euros in 2011, compared to a net profit of 1.8 billion euros in 2010.

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