Nokia Agrees With Unions on 1,000 Job Cuts at Finnish Plant

Nokia Oyj (NOK1V) agreed with unions to cut 1,000 jobs at its oldest factory in Finland, which will be converted for software customization of handsets manufactured in Asia.

Most of the cuts at Salo, which were in line with the plan announced Feb. 8, will take place by the end of June, Nokia said in a statement. The company also plans to cut 2,300 factory- worker jobs in Komarom, Hungary and 700 in Reynosa, Mexico as it performs similar conversions to those plants.

The firings add to more than 10,000 job reductions Chief Executive Officer Stephen Elop has announced since Nokia linked up with Microsoft Corp. (MSFT) a year ago to fight a loss of smartphone market share to Apple Inc. (AAPL) Nokia is shrinking the number of main handset assembly plants to five from nine at the beginning of 2011, and building a new factory in Vietnam for low-end phones. It made the first Lumia handsets at a Compal Communications Inc. factory in Taiwan.

“Now that we are clear on the personnel and the job positions, the changes will start to ramp up to the new mode of operation,” spokeswoman Eija-Riitta Huovinen said by telephone. Nokia expects to complete the conversion in the second half, she said.

Nokia also announced agreement on cutting 624 jobs at its Nokia Siemens Networks joint venture with Siemens AG (SIE) today. Nokia shares declined 1.7 percent to 3.93 euros as of 2:02 p.m. in Helsinki.

Workers whose jobs are terminated will receive five to 15 months of salary depending on their years of service, and those who have not found jobs can get an extra two months of salary, Huovinen said.

The Salo factory, established in 1979 and the oldest of the production plants listed on Nokia’s website, made smartphones for European markets.

To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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