Nokia on Wednesday announced plans to cut 4,000 jobs by the end of 2012 at its smartphone manufacturing factories in Komarom, Hungary (2,300 jobs), Reynosa, Mexico (700 jobs) and Salo, Finland (1,000 jobs).
“The measures follow a review of smartphone manufacturing operations that Nokia announced last September and aim to increase the company’s competitiveness in the diverse global mobile device market,” the company said in a statement.
Nokia said the three factories will focus on smartphone product customization, serving customers mainly in Europe and the Americas. Device assembly is expected to be transferred to Nokia factories in Asia, where the majority of component suppliers are based.
“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 customization and be more responsive to customer needs,” explained Niklas Savander, Nokia’s EVP of Markets.
“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,” Savander said. “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.”
As a result of the plans, the number of steps in manufacturing and the amount of work carried out at the sites in Komarom, Reynosa and Salo are expected to decrease substantially.
Personnel reductions are planned to be phased in through the end of year, with Nokia saying it will offer a “comprehensive locally-tailored support program,” including financial support and assistance with local re-employment.
A few months ago the company closed a plant in Romania, which resulted in 2,200 job cuts. A Reuters report stated that the latest announcement of job cuts brings the total planned job cuts at Nokia since Stephen Elop took over as CEO in September 2010 to more than 30,000.
The latest move of shifting smartphone manufacturing operations to Asia is related to Nokia’s efforts to gain a foothold in the smartphone market. The company is depending on its recently-launched Lumia range (running on Microsoft’s Windows Phone platform) of smartphones to make an impact in the smartphone market which is dominated by Apple and Samsung.
