Nokia to axe 3,500 jobs and close factory

[mawilson 2,133]

From Germany to Romania, and now Asia. Not in America, but this should give us pause - even Romanian labor is now too expensive for these corporations.

Nokia will axe 3,500 jobs and close a manufacturing plant in Romania, as the Finnish handset maker continued its evolution to cope with the growing impact of smartphones on its markets.

Nokia, the world’s largest maker of mobile phones by volume, said the closure of the factory in Cluj would result in 2,200 job losses, with a further 1,300 to be axed at its Location and Commerce division. The division includes Navteq, the digital mapping group, which had just under 6,000 employees when Nokia bought it for $8.1bn in 2007.

Nokia, which employs some 138,634 people, said there could be further job losses announced next year as it changes production at its factories in Salo, Finland, as well as in Hungary and Mexico. These will shift away from assembly and packing of smartphones to focus on customising phones for different markets. Detail of any cuts is expected in the first quarter of 2012.

“We must take painful, yet necessary, steps to align our workforce and operations with our path forward,” said Stephen Elop, Nokia president and chief executive. “With these changes we will emerge as a more dynamic, nimble and efficient challenger.”

Manufacturing operations at Nokia’s Cluj factory, which makes low-end feature phones rather than smartphones, will be moved to Asia where feature phones are predominantly used. Nokia has factories in China, South Korea and India and is building a further facility in Vietnam.

The Cluj factory, which took seven months to build at a cost of $88m, was only opened in 2008 as a replacement for a plant in Bochum, Germany.

“The European market has shifted towards smartphones, whereas the feature phone market is predominant in Asia and we can get greater scale and proximity benefits by using our Asian factories in China and Korea,” said Nokia.

Nokia has struggled to produce smartphones to match Apple’s iPhone and devices featuring Google’s Android software, and the Finnish handset maker is currently trying to revive its fortunes by using Microsoft’s Windows Phone operating system rather than its own Symbian system.

Analysts view the launch as crucial to claw back market share from the increasingly dominant Android and Apple operating systems, which have left Nokia struggling in the premium smartphone market even though it is still a strong competitor in low- to mid-tier handsets.

It emerged this week that Nokia was working on a new, Linux-based operating system for lower-end phones, codenamed Meltemi. While Nokia would not comment on any future products, it confirmed that the company was keen to innovate in the low- to mid-tier area.

“We have a lot of activities under way around connecting the next billion mobile users,” Nokia said.

Thursday’s move is part of a plan announced in April to cut its operating expenses by €1bn over the next three years, which included the axing of 4,000 staff. The 3,500 job cuts at the Romania plant and at the Location and Commerce divisions are in addition to the earlier redundancies.

Nokia shares, which have fallen by more than 40 per cent over the past 12 months, on Thursday edged up by 2 cents, or 0.38 per cent, to €4.20.

link

[Bad_Daddy 2,209]

Nokia took a pretty big hit when those Android phones came out. Now it's HTC, and Samsung who has the lions share of the market not to mention Google bought out Motorola's mobile phone division and their in the game now. Because Google bought out Motorola, look for Samsung and others to start switching from google o/s to Windows o/s on their phones.

[Gary and Alla 3,694]

I am doubting it is the labor cost. Ukraine has low labor cost but oppressivley high tax rates, so much so that most people work for "black money" and even big companies pay in cash or only a small percentage of pay is "official" the rest is cash.

Naturally there are no big employers moving to Ukraine from other countries.

I suspect that Romania has also added and added to what employers must pay until they just say "Enough, we are outta here!"

[mawilson 2,133]

Ukraine has low labor cost but oppressivley high tax rates

Ukraine Personal income tax rates for 2011 are 0%, 1%, 5%, 15%, 17%. (30% for income from prizes and winnings.)

The corporate Tax Law established a basic corporate tax rate of 23%. This is a standard rate from the clean income (i.e. gross income) for the entities and natural persons - private entrepreneurs. However, small legal entities may choose the simplified taxation. Thus VAT - registered entities pay 6% of their sales proceeds under the simplified tax system, while non -VAT - registered entities pay 10%.

Ukraine link

Romania personal income tax rate is a flat 16%.

Corporate income tax rate in Romania is 16%. Certain businesses are subject to a minimum tax equal to 5% of turnover.

Romania link

You think 16/17/23 percent is "oppressive"? The corporate tax rate in China is 25%. Vietnam? Also 25%.

[spookyturtle 9,465]

It's Apple's fault. That damn iPhone is destroying the world.

[Gary and Alla 3,694]

It's Apple's fault. That damn iPhone is destroying the world.

So we did all that "duck and cover" practice and now the world gets destroyed by a cell phone.

[Bad_Daddy 2,209]

It's Apple's fault. That damn iPhone is destroying the world.

Who's going to choose an Apple over a Android?

[mawilson 2,133]

Who's going to choose an Apple over a Android?

A human?

[Gary and Alla 3,694]

I have a brick phone with a rotary dial

[Bad_Daddy 2,209]

I knew I fckd up when I made that post.

[MyLittlePony 340]

Nokia has to get there act together and bust out a smartphone that will kick apple ####.

[웃 910]

Ukraine has low labor cost but oppressivley high tax rates, so much so that most people work for "black money" and even big companies pay in cash or only a small percentage of pay is "official" the rest is cash.

Ukraine Personal income tax rates for 2011 are 0%, 1%, 5%, 15%, 17%. (30% for income from prizes and winnings.)

The corporate Tax Law established a basic corporate tax rate of 23%.

You think 16/17/23 percent is "oppressive"? The corporate tax rate in China is 25%. Vietnam? Also 25%.

If Gary says it then it must be true. He speaks from personal experience and knowledge. He's right, you're wrong.

Naturally there are no big employers moving to Ukraine from other countries.

Foreign air companies knocking on Ukraine’s door

Six low-cost air companies might start their operations in Ukraine, Russia’s Avianova, Irish Ryanair, Arab FlyDubai, German Air Berlin, Slovak Danube Wings and British Easy Jet, The Segodnya reported March 5, 2011.

[SuperDuper! 230]

It's Apple's fault. That damn iPhone is destroying the world.

Why are you so anti-apple, Spooks? Are you mad that you did not buy the stock when it was $13/share or something?

[spookyturtle 9,465]

Why are you so anti-apple, Spooks? Are you mad that you did not buy the stock when it was $13/share or something?

Because they have brainwashed the public. I wish I had bought a thousand shares when it was that cheap.

[Gary and Alla 3,694]

If Gary says it then it must be true. He speaks from personal experience and knowledge. He's right, you're wrong.

Foreign air companies knocking on Ukraine’s door

Six low-cost air companies might start their operations in Ukraine, Russia’s Avianova, Irish Ryanair, Arab FlyDubai, German Air Berlin, Slovak Danube Wings and British Easy Jet, The Segodnya reported March 5, 2011.

Of course I am right. I made the payrol for some 300+ workers. One is mistaken if one thinks the corporate income tax rate is the only thing the employer is required to pay in order to employ someone. Why would anyone think that? Is that what we do here? Does a corporation poay income tax and nothing else? The figures posted are not even the issue regarding employment of people.

If you have no other explanation for why Nokia is moving operations to Asia then I guess we need to lower our minimum wage to $3 per hour. If Asian countries have a higher corporate tax rate I am guessing the savings comes in other costs of employment, which can be wages but is often other costs the company is forced to bear

Airlines deciding to provide service to Kiev or Kharkov hardly qualify as big companies moving their operations to Ukraine. At least try to be relevent.