Nokia today announced plans to take additional actions to align its workforce and operations. The measures support both the execution of the company's strategy and the savings target the company announced earlier this year, and also target to bring efficiencies and speed to the organization.
Earlier this year, Nokia announced changes primarily focused on aligning its R&D operations in Smart Devices and Mobile Phones. Today, the company announced the next phase of operational alignment, which includes plans for reductions in manufacturing, the Location & Commerce business, and supporting functions.
Nokia plans to adjust its manufacturing capacity and renew its manufacturing operations in the following manner:
- Focus its feature phone manufacturing on those locations with optimal proximity to suppliers and key markets. As a result, Nokia plans to close its manufacturing facility in Cluj, Romania by the end of 2011, as Nokia's high-volume Asian factories provide greater scale and proximity benefits.
- Review the long-term role of its manufacturing operations in Salo, Finland, Komarom, Hungary, and Reynosa, Mexico. These factories are expected to continue to play a key role in serving European and North American smartphone customers, but the plan is to gradually shift their focus to customer and market-specific software and sales package customization. It is estimated this would have an impact on the number of personnel in 2012, with no impact in 2011. Nokia will engage in discussions with employee representatives and stakeholders in these sites, and expects to have more visibility into the possible headcount impacts in the first quarter of 2012.
Nokia previously announced its plans to create a Location & Commerce business consolidating location assets including NAVTEQ and Nokia's social location services operations. As part of consolidating this business, Nokia has identified potential synergies and opportunities to increase effectiveness through automation. Location & Commerce is responsible for driving the delivery of the world's best digital mapping content, location platform and social-location experiences. Nokia plans to concentrate its Location & Commerce development efforts in Berlin, Boston, Chicago and other supporting sites, and plans to close its operations in Bonn, Germany and Malvern, US.
"We are seeing solid progress against our strategy, and with these planned changes we will emerge as a more dynamic, nimble and efficient challenger," said Stephen Elop, Nokia President and CEO. "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 Centers 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," said Elop.
The planned closure of the Cluj factory combined with adjustments to supply chain operations is estimated to impact approximately 2,200 employees. The planned changes in the Location & Commerce business are estimated to impact approximately 1,300 employees. These personnel reductions are in addition to the measures announced in April and are expected to take effect by the end of 2012.
Nokia will offer employees affected by the planned reductions a support program.
In related news, Nokia and Siemens today announced the appointment of Jesper Ovesen as Executive Chairman of the Board of Nokia Siemens Networks, effective today.
As Executive Chairman, Ovesen assumes a full-time role with a special emphasis on overseeing the strategic direction of Nokia Siemens Networks. He will work closely with Nokia Siemens Networks CEO Rajeev Suri and his management team in that capacity.
Nokia and Siemens today also announced that they are each providing capital of EUR 500 million to Nokia Siemens Networks to further strengthen the company's financial position.