Nokia cuts handset production and closes R&D site

In what it claims is an alignment with market demand, Nokia has announced plans to scale back handset production and close an R&D site. These moves will take place in Finland and will see production workers at its Salo factory laid-off on a temporary rotational basis, while handset R&D will now be concentrated Tampere, Oulu and Salo leading to the closure of the company's Jyväskylä site.

"The planned closure of the Jyväskylä site is an unfortunate, yet unavoidable measure. We must adjust our resources to reflect reduced market demand in order to maintain our competitiveness also in the future," said Peter Røpke, senior VP of devices at Nokia R&D. The closure will affect all 320 workers at Jyväskylä.

At the Salo production plant--the last major handset factory in Western Europe after Nokia closed its Bochum, Germany, site last year--the 2,500-strong workforce will be temporarily laid-off an a rotating basis, with between 20 per cent and 30 per cent of staff idle at a time.

"With these plans, we aim to scale down Salo production to reflect reduced market demand, while operations in the factory continue uninterrupted," said Juha Putkiranta, senior VP of Nokia's demand supply network management. "This is one of the measures we are taking to adjust our global demand supply network to the current situation."

Nokia, which has previously stated it planned to dramatically reduce annual costs at its key handset unit by more than €700 million, said it would continue to look for savings in operational expenses.

For more on this story:
Cellular News and Mobile News

Related stories:
Nokia reports sharp fall in Q4 sales and profits 
Nokia ends production of N810 WiMAX tablet
Nokia closure plan sparks protests
Nokia's U.S. challenge: Can it return to its past glory?

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