The Channel logo


By | Bill Ray 8th February 2012 09:59

Nokia axes 4,000, shifts smartphone manufacturing East

Factories hit in cost-cutting drive

Having reviewed operations at its manufacturing facilities in Hungary, Mexico and Finland, Nokia has decided to halt its assembly lines there. Smartphones will still be customised at the three sites, but the gear itself will be built in Asia.

The change will affect 4,000 jobs between the factories – loading custom firmware onto handsets and sticking SIMs in boxes doesn’t require as many people as assembling the devices themselves. The manufacturing work will be switched to existing Nokia facilities in Asia.

This move isn't a complete surprise: Nokia announced last September that it would be considering the future of the three facilities, and not in a good way. This is part of the ongoing cost reduction already announced by the company, but it's not just reduced labour costs which are pushing companies to the Far East.

Most of the components in a phone are made nearby, and that makes manufacturing more flexible. Nokia claims the move will enable faster innovation and better time to market, though low pay and an often-more-relaxed attitude to employment law are obviously attractive.

The downsized sites will remain open, fiddling with handsets rather than making them. That means creating operator-variants, which may be loaded with specific software such as Three's "3 Hub", or just with an operator SIM in the box or pre-slotted into the handset. The bigger the order, the greater the variation allowed, although these days Nokia will take money too.

That's small compensation for the sites, as is Nokia is making the usual noises about "supporting our personnel and their local communities during the transition". ®

comment icon Read 22 comments on this article alert Send corrections


Frank Jennings

What do you do? Use manual typwriters or live in a Scottish croft? Our man advises
A rusty petrol pump at an abandoned gas station. Pic by Silvia B. Jakiello via shutterstock

Trevor Pott

Among other things, Active Directory needs an overhaul
Baby looks taken aback/shocked/affronted. Photo by Shutterstock

Kat Hall

Plans for 2 million FTTP connections in next four years 'not enough'
Microsoft CEO Satya Nadella


League of gentlemen poster - Tubbs and Edward at the local shop. Copyright BBC
One reselling man tells his tale of woe