Nokia has just announced one of the biggest job cuts in its restructuring efforts slashing 4,000 positions in Finland, Hungary and Mexico in order to get closer to its Asian suppliers and optimize delivery times and cost.
Handset manufacturing will shift to Asia, closer to component suppliers, which makes financial sense. Factories like the one in Salo, Finland and Komarom, Hungary, traditionally responsible for making high-end smartphones for the European market, will now shift their focus on product customization for Europe and America.
The company will start the job cuts now and is expected to continue “optimizing workforce” by the end of the year.
The company doesn’t quote financials as the main reason for the shift, rather focusing on component suppliers and most important the time it takes a device to reach markets. With the move to Asia Nokia phones should start arriving on shelves faster and that aligns with Nokia’s chief executive plans to speed up deliveries.
“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,” said Niklas Savander, Nokia executive VP of Markets.
Nokia closed down its factory in Romania last September, and after that it has also been reevaluating its factories in Finland, Hungary and Mexico. Initially, Nokia tried to not cut the meat so close to the bone, but this time it’s axing jobs in its homeland of Finland as well.
+- Press Release
Nokia plans changes to its manufacturing operations to increase efficiency in smartphone production
Stock exchange release
February 8, 2012 at 10:00 (CET +1)
Espoo, Finland - Nokia has today announced planned changes at its factories in Komarom, Hungary, Reynosa, Mexico and Salo, Finland. 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.
These three factories are planned to 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," said Niklas Savander, Nokia executive vice president, 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," said Savander. "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 consequence 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. The changes are anticipated to impact approximately 4,000 employees in total.
Personnel reductions are planned to be phased through the end of 2012. Nokia will offer a comprehensive locally-tailored support program, including financial support and assistance with local re-employment.
Nokia is a global leader in mobile communications whose products have become an integral part of the lives of people around the world. Every day, more than 1.3 billion people use their Nokia to capture and share experiences, access information, find their way or simply to speak to one another. Nokia's technological and design innovations have made its brand one of the most recognized in the world. For more information, visit http://www.nokia.com/about-nokia.