Nokia will cut 4,000 more jobs at its factories in Finland, Hungary and Mexico as it looks to reduce costs by shifting handset assembly to Asia.
The company said Wednesday that the headcount reductions would be phased throughout 2012, and had been under review since announcing the closure of its Romanian factory last September. These latest cuts--8 per cent of the company's total workforce--bring the number of total planned job cuts across the company to over 30,000 since Stephen Elop was named CEO in September 2010.
"This was inevitable. It was a surprise it took so long for the decision to be made," Steve Brazier, chief executive of technology research firm Canalys, told Reuters. "Stephen Elop may be a polarising figure, but he is proving effective at driving the change and he should be credited for that."
The company says the three plants will remain open but will now focus on software development for maps, applications and local operators' software requirements. However, some of these units will be hit hard, according to a WSJ report. The Komarom plant in Hungary will see 2,300 of its 4,400 jobs being cut in, 700 out of 1,000 jobs will go in Reynosa, Mexico, and 1,000 out of 1,700 factory jobs in Salo, Finland.
By moving its handset factories to Asia, where the company sells more phones than in any other region, Nokia is looking to cut delivery times and costs, and be nearer key component suppliers.
Helena Nordman-Knutson, an analyst with the Swedish investment bank Pareto Ohman, told the WSJ 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," she said.
This isn't the first wave of job cuts for Nokia. In September, the company said it would cut 3,500 jobs as part of its reorganization. In addition, the company transferred its Symbian software activities as well as about 2,300 employees to global management consulting, technology services and outsourcing firm Accenture.
Fitch: Nokia lags competition but has time to gain traction
Nokia's Lumia sales show promise in Q4, but Symbian continues to slide
Report: Nokia under pressure to slash Lumia 710 pricing in UK
Nokia, Microsoft boosted by bullish Credit Suisse report on Windows Phone
Nokia's Elop: Boosting Windows Phone volumes is the top priority