Finland-based Nokia Corp. (NOK) Wednesday announced plans to reduce 4,000 jobs in its factories in Hungary, Mexico and Finland, as it intends to shift device assembly operations in these units to Asia. The move underscores Nokia's attempt to reduce some costs by moving closer to where a majority of its component suppliers are based in, as the world's top mobile handset maker grapples with falling market share and intense competition in the smartphone market.
The company noted that the three factories will now focus on smartphone product customization, serving customers mainly in Europe and the Americas. The decision, Nokia says, was intended to increase competitiveness in the global mobile device market.
The planned changes at the factories located in Komarom, Hungary; Reynosa, Mexico; and Salo, Finland follow a review of smartphone manufacturing operations that Nokia announced last September.
Personnel reductions are planned to be phased through the end of 2012. Nokia added that it would offer a comprehensive locally-tailored support program, including financial support and assistance with local re-employment.
Niklas Savander, Nokia executive vice president, 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."
Last month, Nokia Siemens Networks, a 50-50 joint venture between Nokia and Germany's Siemens AG (SI), reportedly announced plans to cut a total of 4,100 jobs in Germany and Finland as part of its larger extensive global restructuring program that commenced in November 2011.
In January, the company reported about a $1.4 billion loss for the fourth quarter, as net sales plunged 21 percent. Citing an uncertain macroeconomic environment, the world's top mobile handset maker by volume, had said it is increasingly difficult to estimate its outlook and provide reliable targets. In a space dominated by Apple and Google, the struggling company managed to sell 19.6 million smartphones in the quarter. However, sales of Smart devices dropped 38 percent from a year ago.
In Helsinki, Nokia shares are trading at 3.94 euros, up 1.33 percent, on 2.95 million shares. In the U.S., Nokia shares ended Tuesday's regular trading at $5.13.
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