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Nokia Planning 3500 Job Cuts By 2012

Nokia today announced a further 3,500 job cuts by 2012, as the company tries to save costs and restructure with their global smartphone market share falling.

Nokia will be closing their manufacturing plant in Cluj, Romania, by the end of 2011, because its “high-volume Asian factories provide greater scale and proximity benefits“, which means 2,200 job cuts, at the plant. Nokia will also have 1300 job cuts globally in their location and commerce sector, which has involves navigational services, digital mapping and location platforms. The Finnish giant will also close their operations in Bonn, Germany, and Malvern, Pennsylvania.

That’s in addition to the already announced 7000 job cuts back in April. Other announcements include Jesper Ovesen appointed as executive chairman of the board of Nokia Siemens Networks to replace Olli-Pekka Kallasvuo.

Nokia CEO said the layoffs were “painful yet necessary“:

“We are seeing solid progress against our strategy, and with these planned changes we will emerge as a more dynamic, nimble and efficient challenger”

Full Press Release Below:

Nokia continues to align its workforce and operations

Next phase of changes to improve efficiencies in manufacturing, Location & Commerce, and supporting functions

Espoo, Finland – Nokia today announced plans to take additional actions to align its workforce and operations. The measures support both the execution of the company’s strategy and the savings target the company announced earlier this year, and also target to bring efficiencies and speed to the organization.

Earlier this year, Nokia announced changes primarily focused on aligning its R&D operations in Smart Devices and Mobile Phones. Today, the company announced the next phase of operational alignment, which includes plans for reductions in manufacturing, the Location & Commerce business, and supporting functions.

Nokia plans to adjust its manufacturing capacity and renew its manufacturing operations to better serve its global network of customers, partners and suppliers in the following manner:

– Focus its feature phone manufacturing on those locations with optimal proximity to suppliers and key markets. As a result, Nokia plans to close its manufacturing facility in Cluj, Romania by the end of 2011, as Nokia’s high-volume Asian factories provide greater scale and proximity benefits.

– Review the long-term role of its manufacturing operations in Salo, Finland, Komarom, Hungary, and Reynosa, Mexico. These factories are expected to continue to play a key role in serving European and North American smartphone customers, but the plan is to gradually shift their focus to customer and market-specific software and sales package customization. It is estimated this would have an impact on the number of personnel in 2012, with no impact in 2011. Nokia will engage in discussions with employee representatives and stakeholders in these sites, and expects to have more visibility into the possible headcount impacts in the first quarter of 2012.

Nokia previously announced its plans to create a Location & Commerce business consolidating location assets including NAVTEQ and Nokia’s social location services operations. As part of consolidating this business, Nokia has identified potential synergies and opportunities to increase effectiveness through automation. Location & Commerce is responsible for driving the delivery of the world’s best digital mapping content, location platform and social-location experiences. Nokia plans to concentrate its Location & Commerce development efforts in Berlin, Boston, Chicago and other supporting sites, and plans to close its operations in Bonn, Germany and Malvern, US.

Nokia is also starting consultations with employees in Sales, Marketing and Corporate Functions, in line with Nokia’s earlier announcement on April 27, 2011.

“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.”

“Europe is core to Nokia’s future. In addition to our headquarters, we have a strong R&D presence in Europe. We have four major R&D sites in Finland and two major R&D sites in Germany, as well as Nokia Research Centers and other supporting R&D sites in Europe. Nokia also retains a strong local presence in our many sales offices throughout this region, as well as our operations in Salo and Komarom,” said Elop.

The planned closure of the Cluj factory combined with adjustments to supply chain operations is estimated to impact approximately 2,200 employees. The planned changes in the Location & Commerce business are estimated to impact approximately 1,300 employees. These personnel reductions are in addition to the measures announced in April and are expected to take effect by the end of 2012.

In line with the company values, Nokia will offer employees affected by the planned reductions a comprehensive support program. Nokia remains committed to supporting its employees and the local communities through this difficult change.