Nokia to cut 4,000 jobs

Nokia Corp. said Wednesday it plans to cut about 4,000 jobs at smartphone manufacturing plants by the end of the year.

The cuts will take place at plants in Hungary, Mexico and Finland. Nokia—the world's largest handset maker by unit shipments—said it would move device assembly closer to component suppliers in Asia in an attempt to get its products to the market more quickly.

"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's executive vice president, markets.

In its latest move as it revamps its strategy, Nokia said it plans to cut 2,300 of the 4,400 jobs in Komarom, Hungary, 700 out of 1,000 jobs in Reynosa, Mexico, and 1,000 out of 1,700 factory jobs in Salo, Finland, as part of a long-term review of the plants announced in September. The three smartphone factories will instead focus on software development for languages, maps, applications and local operators' software requirements.

"It's really about speed, responsiveness and improving our time to market," said Nokia spokesman James Etheridge. "It's important to ensure that software customization happens close to the customers, certainly in Europe and Eurasia, which is the focus of Salo and Komarom."

Nokia has so far announced plans to shed around 14,000 jobs since last February's decision to adopt Microsoft Corp.'s Windows Phone operating system in all its new smartphones and phase out its aging Symbian platform. It believes the move will help it regain market share after struggling to compete with Apple Inc.'s iPhone and smartphones using Google Inc.'s Android software.

Nokia had 130,000 employees at the end of 2011, including 66,000 at its loss-making Nokia Siemens Networks joint venture with Germany's Siemens AG.

Pareto Ohman analyst Helena Nordman-Knutson said the job cuts were both expected and logical.

"In addition to the time-to-market perspective offered by Nokia, there's also a cost-efficiency perspective—there's no possibility of Nokia keeping an expensive production facility in Finland," Ms. Nordman-Knutson said, declining to give a rating on the stock. Its last published rating was overweight with a €5.2 ($6.9) price target.

Nokia said it will offer a support program for the affected workers, including financial support and assistance with local re-employment.

(Published by WSJ - February 8, 2012)