Nokia Oyj, the world's largest cellphone vendor by volume, is cutting 3,500 jobs in its second major restructuring in six months as it struggles with falling sales and profits. Chief Executive Stephen Elop, who took over at Nokia a year ago, unveiled the plan on Thursday which includes a factory closure and a new executive chairman for telecom gear joint venture Nokia Siemens Networks.
The company said it would close the Cluj plant in Romania which opened just four years ago and manufactured more simple cellphone models, leading to 2,200 job losses. "Just as I received with satisfaction the news of Nokia investing in Romania we must accept that such type of investment carries the risk that we've seen today," Romanian President Traian Basescu told reporters.
The plant's turnover was comparable to 1.3 percent of Romania's GDP last year, but eastern European investment group Avaron said due to large component flows the value created at the plant was only around 0.25 percent of GDP. Nokia said a further 1,300 jobs would be cut at its Location & Commerce business unit, which includes the world's largest digital mapping business Navteq. Nokia said it was also evaluating the future of its plants in Finland, Mexico and Hungary and this would result in job cuts next year.