Nokia to cut 3,500 jobs, close Romania plant

Thu Sep 29, 2011 1:35pm EDT
 
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By Tarmo Virki, European Technology Correspondent

HELSINKI (Reuters) - Nokia Oyj, the world's largest cellphone vendor by volume, is cutting 3,500 jobs in its second major restructuring in six months as it struggles with falling sales and profits.

Chief executive Stephen Elop, who took over at Nokia a year ago, unveiled the plans which include a factory closure and a new executive chairman for telecom gear joint venture Nokia Siemens Networks, on Thursday.

The company said it would close the Cluj factory in Romania which opened just four years ago and manufactured more simple cellphone models, leading to 2,200 job losses.

The plant turnover was comparable to 1.3 percent of Romania's GDP last year, but Eastern European investment group Avaron said due to large component flows the value created at the plant was smaller, giving a rough estimate of around 0.25 percent of GDP.

Nokia said a further 1,300 jobs would be cut at its Location & Commerce business unit, which includes the world's largest digital mapping business Navteq.

Nokia said it was also evaluating the future of its plants in Finland, Mexico and Hungary and this would result in job cuts next year.

The latest redundancies come on top of cost cut plans set out in April which included laying off 4,000 staff. Thursday's cuts are included in Nokia's savings target of more than one billion euros, which was unveiled in July.

"This is very shocking. As if they had no policy at all in human resources, only lay-off talks rolling all the time. I wonder how people can work there, how people can focus at all," Pertti Porokari, the chairman of Finnish engineers' union (UIL), told Reuters.   Continued...