Nokia to shift assembly to Asia and cut 4,000 jobs

Posted on 8 Feb 2012 by Tim Brown

Nokia announced plans today to expand production in Asia which will result in 4000 job losses at its factories in Hungary, Mexico and Finland.

The decision follows a review of Nokia’s smartphone manufacturing operations that it announced in September last year. Nokia said the change in production aims ‘to increase the company’s competitiveness in the diverse global mobile device market’. The majority of mobile phone component suppliers are based in Asia.

The manufacturer said the exiting factories will focus on smartphone product customisation but there would be a substantial decrease in the work carried out on those sites. Around 4,000 employees will be affected and the changes will be completed by the end of 2012.

Niklas Savander, Nokia executive VP for markets, said: ‘With the planned changes, our factories at Komarom, Reynosa and Salo will continue to play an important role serving our smartphone customers. They give us a unique ability to both provide customization and be more responsive to customer needs.

‘Shifting device assembly to Asia is targeted at improving our time to market. 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 Savander. “We recognize the planned changes are difficult for our employees and we are committed to supporting our personnel and their local communities during the transition.’

For all of 2011, the Nokia posted a net loss of £1bn, compared to a net profit of £1.5bn a year earlier, while the final quarter of the year was hammered with a £892m net loss after a profit of £621m in the same period a year earlier. Sales for 2011 were down 9% at £32.3bn.