Nokia to scale back its manufacturing

11 Feb 2009

Responding to the slumping global mobile phone market, Nokia has said it plans to close one of its R&D sites, as well as scale back production with staggered layoffs.

The world’s biggest phone maker said it plans to close its mobile devices R&D site in Jyväskylä, Finland, instead concentrating mobile devices R&D at sites in Tampere, Oulu, Salo and the Helsinki metropolitan area.

The planned change reflects cutbacks in Nokia’s overall device portfolio and will allow it to increase efficiencies in R&D and reduce operating expenditure.

Nokia’s plan is to focus product creation at larger sites, closer to technology asset creation, “which enables the optimal use of competencies and infrastructure.”

Nokia also plans to scale down Salo production with staggered temporary lay-offs, aligning production with market demand, while continuing operations without interruption. Nokia said it will begin consultations with employee representatives about these plans.

Nokia’s operations in Jyväskylä focus mainly on mobile device product development and marketing. Nokia plans to gradually ramp down the site and close it by the end of 2009.

The planned change affects 320 employees working at the Jyväskylä site. The majority of employees at Nokia Jyväskylä work for devices product development, but the site also has some marketing activities and global support functions.

Nokia plans to concentrate its mobile device R&D in Finland at existing sites in Tampere, Oulu, Salo and the Helsinki metropolitan area.

“Our employees in Jyväskylä are highly competent and have contributed to the creation of numerous hit products. The planned closure of the Jyväskylä site is an unfortunate, yet unavoidable measure. We must adjust our resources to reflect reduced market demand in order to maintain our competitiveness also in the future,” said Peter Røpke, senior vice-president, Devices R&D, Nokia.

By John Kennedy