Nokia today (29 September) announced plans to axe 3,500 jobs as it reduces its manufacturing capacity, Location & Commerce business and some supporting functions. The measures are part of the company's strategy to make savings and bring more efficiencies and speed to the organisation.
Earlier this year, Nokia announced changes primarily focused on aligning its R&D operations in Smart Devices and Mobile Phones. Today, the manufacturer announced the next phase of operational alignment.
The company intends to close its manufacturing facility in Cluj, Romania by the end of 2011, as Nokia's high volume Asian factories provide greater scale and proximity benefits. Nokia said its aim is to focus its feature phone manufacturing on those locations with optimal proximity to suppliers and key markets.
Nokia will also review the long-term role of its manufacturing operations in Salo, Finland, Komarom, Hungary, and Reynosa, Mexico. These factories are expected to continue to play a key role in serving European and North American smartphone customers, but the plan is to gradually shift their focus to customer and market-specific software and sales package customisation.
The manufacturer said it estimated this would have an impact on the number of personnel in 2012, but will have no impact in 2011. Nokia will engage in discussions with employee representatives and stakeholders in these sites, and expects to have more visibility into the possible headcount impacts in the first quarter of 2012.
Nokia’s Location & Commerce business, which looks after location assets including NAVTEQ and Nokia's social location services operations, is also facing cuts. The company plans to close its operations in Bonn, Germany and Malvern, US. Location & Commerce development efforts will now be concentrated in Berlin, Boston, Chicago and other supporting sites.
Nokia is also starting consultations with employees in Sales, Marketing and Corporate Functions, in line with Nokia's earlier announcement on 27 April 2011.
The planned closure of the Cluj factory, combined with adjustments to supply chain operations, is estimated to affect approximately 2,200 employees. The changes in the Location & Commerce business are estimated to hit approximately 1,300 employees. These personnel reductions are in addition to the measures announced in April and are expected to take effect by the end of 2012.
Nokia President and CEO Stephen Elop (pictured) said: ‘We are seeing solid progress against our strategy, and with these planned changes we will emerge as a more dynamic, nimble and efficient challenger. We must take painful, yet necessary, steps to align our workforce and operations with our path forward.
‘Europe is core to Nokia's future. In addition to our headquarters, we have a strong R&D presence in Europe. We have four major R&D sites in Finland and two major R&D sites in Germany, as well as Nokia Research Centers and other supporting R&D sites in Europe. Nokia also retains a strong local presence in our many sales offices throughout this region, as well as our operations in Salo and Komarom,’ said Elop.