Nokia, the largest mobile phone manufacturer in the world in terms of volume, has announced the reduction of 3,500 jobs as it initiates a major restructuring of the company for the second time in the last six months as the company struggles with dropping profits and sales. The CEO, Stephen Elop, who took the position a year ago, announced the plans which also include the closure of a factory and a new appointment for the post of the executive chairman of the Nokia Siemens Network which is a telecom gear joint venture of the company.
According to the statement of the company, the Cluj factory situated in Romania, which became operational just four years ago for manufacturing the simpler models of the company’s mobile phone handsets, is going to be closed which will ultimately result in the loss of 2,200 jobs.
Last year, the turnover of the plant was almost comparable to 1.3% of the GDP of Romania; however Avaron, which is an investment group based in Eastern Europe, stated that the value which was created at the plant was much smaller because of the large flows of components, which ultimately fell to 0.25% of the GDP. Nokia also said that another 1,300 employees will lose their jobs at the Location & Commerce business unit of the company, which also includes Navteq, which is the largest digital mapping business in the world.
Nokia is also contemplating the evaluation of its future plans for Finland, Hungary and Mexico which may lead to many more terminations during the next year. These redundancies have emerged after the cost cutting plans which the company decided to follow this April, according to which, 4000 jobs will need to be laid off. The cuts announced this Thursday are also included in the savings target set at over a billion euros for Nokia.
The chairman of the Engineers’ union of Finland, Pertti Porokari, said that the news comes as a big shock, and it seems that the phone manufacturer has no regard for its human resources as the officials always include lay-offs in their ideas of cost cutting. This year has seen Nokia struggling a lot as the company’s sales and profits have both fallen down after its announcement this February to divert to manufacturing smartphones based on Microsoft’s Windows Phone platform.
