Handset-manufacturing giant Nokia is restructuring again, something that’s expected to save the company money but cost 3,500 people their jobs in the process. That adds to the 6,800 previously announced earlier this year.
This is the second phase of the company’s “operational alignment," which includes reductions in manufacturing, the Location & Commerce business, and supporting functions. The previously announced changes focused on aligning R&D in smart devices and mobile phones.
Nokia has several new plans to accomplish its goals. First, it’s focusing its feature-phone manufacturing on locations that are close to suppliers and key markets – that means closing its manufacturing facility in Clui, Romania, by the end of the year since high-volume factories in Asia can not only produce more devices, but are closer to a larger number of potential buyers. That will result in 2,200 job cuts. Second, the company is taking a long look at the long-term role of manufacturing operations in Salo, Finland; Komarom, Hungary; and Reynosa, Mexico. We’ll know more next year if that results in more job cuts. And third, mapping and commercial development operations in Pennsylvania and Germany will be shuttered, with more focus put on similar operations in Boston, Chicago and Berlin. That’s another 1,300 jobs lost.
"We are seeing solid progress against our strategy, and with these planned changes we will emerge as a more dynamic, nimble and efficient challenger," said Stephen Elop, Nokia president and CEO. "We must take painful, yet necessary, steps to align our workforce and operations with our path forward."
Many of the soon-to-be-out-of-work employees might have some time to look for a new job. Nokia says all personnel reductions announced this year are expected to take effect by the end of 2012.
Investors reacted favorably to Thursday's news, sending the company's stock price up almost 4 percent.
Nokia has faced increasing handset competition in recent years, particularly from Apple's iPhone – the world's best-selling smartphone – as well as many new devices rolled out by HTC, Samsung, Motorola and more.
