Nokia To Close Romanian Research And Development Center, Cut 120 Jobs

04.27.2011 By Gavrila Oana

Finnish mobile giant Nokia could lay off about 120 employees from its Research and Development Center in Cluj, central Romania, and the center will be shut down by the end of the third quarter, part of the group’s strategy to align its global workforce and consolidate site operations.

Finnish mobile giant Nokia could lay off about 120 employees from its Research and Development Center in Cluj, central Romania, and the center will be shut down by the end of the third quarter, part of the group's strategy to align its global workforce and consolidate site operations.

The company said in a press release Wednesday the alignment process to Nokia's global strategy will impact about 120 employees of the research and development site in Cluj, which will be shut down by the end of the third quarter of 2011.

Nokia added its Romanian research and development operations will be taken over by other centers and no changes are planned for the mobile giant's production factory in Jucu, Cluj county.

Nokia's plans to align its global workforce and consolidate site operations target to reduce its Devices & Services non-IFRS operating expenses by EUR1 billion in 2013, compared to 2010.

Nokia also plans to consolidate the company's research and product development sites so that each site has a clear role and mission. Nokia expects the expansion of some sites and the contraction or closure of others, the company said in a press release.

All employees affected by the reduction plans can stay on the Nokia payroll through the end of 2011.

"Nokia expects personnel reductions to occur in phases until the end of 2012, linked to the roll-out of Nokia's planned product and services portfolio. During this period, Nokia intends to ramp up its capacity for the development of Nokia smartphones based on the Windows Phone platform, the company's broad range of mobile phones and its services portfolio," the company said.

Also Wednesday, Nokia announced plans to form a strategic collaboration with Accenture that would result in the transfer of Nokia's Symbian software activities, including about 3,000 employees to Accenture. In addition, Nokia also plans to reduce its global workforce by about 4,000 employees by the end of 2012, with the majority of reductions in Denmark, Finland and the UK.

"At Nokia, we have new clarity around our path forward, which is focused on our leadership across smart devices, mobile phones and future disruptions," said Stephen Elop, Nokia president and CEO. "However, with this new focus, we also will face reductions in our workforce. This is a difficult reality, and we are working closely with our employees and partners to identify long-term re-employment programs for the talented people of Nokia."

Nokia is launching a comprehensive social responsibility program for employees and the communities likely to be affected by the personnel reductions. The program will be led locally, with local partners and stakeholders, and senior management support.

"We are offering those who are losing their jobs a range of options, from individual re-employment support and re-training to making investments to promote innovation and working with a variety of partners to create new opportunities," Elop continued.

Nokia posted a 1.4% in net profit in the first quarter of 2011, to EUR344 million. Its net sales increased 9% in the first quarter, to EUR10.4 billion.

The mobile giant's Devices & Services division posted a 6% growth in sales, to EUR7.1 billion, while Nokia Siemens Networks posted a 17% increase in sales, to EUR3.2 billion.