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Nokia downsizing operations in emerging markets

Nokia has announced that it is downsizing its handset business, cutting 3500 jobs. The cuts – which the firm has deemed an "operational alignment" to “adjust its manufacturing capacity” - will bring the manufacturer in line with savings targets. Nokia CEO Stephen Elop described the cuts as “painful, yet necessary, steps to align our workforce and operations with our path forward.”

One third of the cuts (1,100) will be shared between Germany and the US (Bonn and Malvern, respectively) while the majority (2,200) will result from the closing of a factory in Cluj, Romania. The facility will be shut down by the end of 2011 and its responsibilities will be largely assumed by Nokia's “high-volume Asian factories [which] provide greater scale and proximity benefits.”

In April this year, Nokia announced that it would cut 7,000 jobs, and manufacturing facilities in Mexico and Hungary are reportedly under consideration for further redundancies. Job cuts in Germany and the US will largely be absorbed by the creation of the Location & Commerce unit - focused on mapping and location technologies – which will have centres in Berlin, Boston and Chicago.

A statement from Nokia concerning its facilities in Mexico and Hungary read: “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.”

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