The mobile phone world hasn't been kind to Nokia over the last year or so. While the company is still the biggest seller of mobile phones in the world, the vast majority the phones that it sells or lower profitability basic phones and feature phones. Nokia has so far been unable to compete in the high-end and profitable smartphone market.
Nokia, however, today announced some significant changes to its manufacturing operations.Nokia intends to institute significant changes at factories in Komarom, Hungary, Reynosa, Mexico and Salo, Finland. The three factories will focus on smartphone product customization and the products at the locations will be sold in Europe and the Americas. Device assembly will be transferred to Nokia factories that are in Asia since that is where the vast majority of component suppliers are located.
"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," said Niklas Savander, Nokia executive vice president, Markets.
The changes mean a significant decrease in manufacturing and the amount of work to be carried out at these three locations. Because of reduced output, Nokia will be getting rid of 4,000 employees between all three facilities. The layoffs are intended to be phased throughout the year and will be completed by the end of 2012.
Nokia also notes that it will offer a support program tailored to each location that will include monetary assistance and help finding another job locally.
"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."