Nokia set to axe 3,500 staff

Mobile phone giant insists Europe is core to its future as numerous sites across the region, and in North America are targeted for cuts or closure

Nokia is set to slash its workforce by 3,500 by next year as it shuts down a factory in Romania and reviews other global facilities.

In a statement released today, the mobile phone giant insisted Europe was a key part of its strategy, but said the job losses were the result of its "next phase of operational alignment".

The firm said the closure of the Cluj manufacturing facility was because its high-volume Asian factories provide greater scale and proximity benefits. In addition, the vendor is reviewing the long-term role of its manufacturing operations in Salo in Finland, Komarom in Hungary and Reynosa in Mexico.

These factories "continue to play a key role in serving European and North American smartphone customers", the firm said, but the plan is to "gradually shift their focus to customer and market-specific software and sales package customisation".

Nokia said it will engage with employee representatives and stakeholders at these sites, with "headcount impacts" expected in the first quarter of 2012. The firm is also consolidating its Location & Commerce businesses, focusing on Berlin, Boston, Chicago and various supporting sites, but will close operations in Bonn, Germany and Malvern in the US.

Stephen Elop (pictured), president and chief executive of Nokia, said: “We are seeing solid progress against our strategy, and with these planned changes we will emerge as a more dynamic, nimble and efficient challenger. 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 Centres 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."

Nokia said it will offer all affected employees a "comprehensive support programme in line with company values".