Mobile Phone Maker Nokia to Cut 4,000 Factory Jobs

The world's largest mobile phone maker says it plans to eliminate roughly 4,000 manufacturing positions, or about 7 per cent of its entire work force.

Nokia cited efforts to become more efficient in its production of smartphones as the main reason behind the cutback.

On Wednesday, February 8, 2012, the Espo, Finland-based firm announced that it would eliminate certain jobs from three of its major factories, specifically those located in Komarom, Hungary, Reynosa, Mexico, and Salo, Finland.

Nokia says the bulk of the planned layoffs will come at its Hungarian facility, with less drastic cuts being made at the Mexican and Finnish plants.

Already the worldwide leader in mobile phone production by volume, Nokia is positioning the upcoming layoffs as part of its plans to transfer the assembly of smartphones to some of its other facilities in Asia.

The company says it expects to go ahead with the 4,000 job cuts in stages, proceeding to issue the pink slips in phases, over the course of 2012. (Source: nytimes.com)

Cutbacks Could Improve Time to Market

Eliminating so many jobs and transferring the work to Asia would bring the company's manufacturing plants closer to where its components are made, thereby reducing the amount of time it takes for products to go from the construction stage to retail outlets.

"Shifting device assembly to Asia is targeted at improving our time to market," noted Nokia mobile division executive, Niklas Savander.

"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." (Source: ft.com)

Nokia Struggling with Platform Transition

The cuts are among other efforts to improve overall efficiency within a company experiencing difficulties as it transitions from the Symbian smartphone platform to newer Lumia Windows phones from Microsoft.

With operators getting rid of Symbian-based smartphones (or demanding heavy price cuts for them), Nokia suffered fourth quarter losses of $1.5 billion, with sales down more than twenty per cent over the same period in 2011.

Nokia currently employs about 57,000 workers worldwide, down from 66,000 at the end of 2010. It's not yet clear if the firm will have to lay off more employees should sales of Symbian smartphones continue to decline.