Nokia will lay off 4000 and move more manufacturing to Asia

Nokia hopes the changes will help it bring out new smartphones faster

Nokia has decided to move more of its manufacturing to Asia, and will lay off about 4000 workers at three factories in Europe and Mexico by the end of the year, the company said on Wednesday.

The affected factories, in Komarom, Hungary, Reynosa, Mexico, and Salo, Finland, together employ 8900. Nokia said it would review the three factories in September, when it announced it would close another factory, in Cluj, Romania, by the end of 2011, as the company's Asian factories provided greater scale and proximity to component manufacturers.

Nokia's goal in moving its phone manufacturing to Asia is to become more competitive, it said. The company is ramping up the roll-out of smartphones based on Windows Phone, while the sale of Symbian-based smartphones is dropping faster than expected.

The company plans to increase the rate at which Windows Phone-based Lumia smartphones become available in new markets and the pace at which new models are launched, Nokia CEO Stephen Elop said during a conference call following the release of the company's fourth quarter financial results.

The employees that survive the cuts will work on "smartphone product customization", according to Nokia. The customization could include tailoring the software of smaller batches of phones for an operator, a spokeswoman at Nokia said.

For the fourth quarter, Nokia reported sales of €10 billion (US$13.3 billion), down 21 per cent year on year, and a net loss of €1.07 billion, compared to a net profit of €745 million a year earlier.

Like many of its competitors, Nokia is now getting ready for Mobile World Congress in Barcelona. The company has scheduled a news conference for February 27.

Send news tips and comments to mikael_ricknas@idg.com

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Mikael Ricknäs

IDG News Service
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