Business World

Sunday 19 November 2017

Cost-cutting Nokia axes 4,000 more jobs

Getty Images
Getty Images

Tarmo Virki

STRUGGLING Finnish phone- maker Nokia plans to cut 4,000 more jobs at its plants in Finland, Hungary and Mexico as it seeks to cut costs by moving smartphone assembly work to Asia.

The cuts of 8pc of the phone- business workforce bring total planned job cuts at the group since Stephen Elop took over as chief executive in September 2010, to more than 30,000 .

Nokia said in a statement the job cuts would take place in phases throughout the year.

"This was inevitable. It was a surprise it took so long for the decision to be made," said Steve Brazier, chief executive of technology research firm Canalys.

"Stephen Elop may be a polarising figure, but he is proving effective at driving the change and he should be credited for that," he added.

Nokia's recent business results have underscored the need for drastic cuts. Late last month it reported a 73pc fall in quarterly earnings as sales of new Windows Phones failed to make a dent in the dominance of Apple's iPhone or compensate for diving sales of its own old smartphones.

Its fourth-quarter smartphone sales shrank 31pc from a year ago and the business made a steep loss for the quarter.

Nokia said it would cut 2,300 jobs in Hungary, where it is a major exporter, some 1,000 in Finland and 700 in Mexico.

Its Finnish factory in Salo, which was the cornerstone for its success in 1990s, has been the last remaining major phone- assembly plant in Western Europe for some time. Most rivals have moved their production to Asia.

The Hungarian government said it regretted Nokia's decision.

Analyst Gergely Suppan at Takarekbank in Budapest noted the highest value-added activities would stay in Hungary.

The move comes only months after Nokia closed its plant in neighbouring Romania, laying off some 2,200 people there.


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