Nokia Siemens Networks cutting 750 jobs in Espoo

The mobile networks company Nokia Siemens Networks (NSN) is closing down its factory in Karaportti in Espoo. At the same time the company is initiating co-determination talks to trim up to 750 members of its staff in Finland.
      The closure of the Espoo factory is leading to the loss of 350 of the NSN jobs.
      Mika Vehviläinen, Chief Operating Officer of NSN, says that after the merger of the mobile network units of Nokia and Siemens, NSN has simply had too many factories.
      The Espoo factory manufactures microwave radios and products for radio networks and switching systems. Output is to be reduced step by step over the spring and summer of 2009, and will be transferred to other factories in Europe and Asia.
     
The personnel cutbacks announced on Tuesday will be the last stemming from the merger that led to the formation of the company.
      So far, NSN has shed 500 people from the payroll in Finland, mainly through voluntary support packages. In addition, personnel numbers have been reduced through retirement and outsourcing. After the cutbacks, NSN will continue to employ about 7,000 people in Finland, which is more than 2,000 fewer than when it started. Staff reductions will be about 9,000 worldwide.
     
The reductions announced on Tuesday are arrangements that were specifically the result of plans linked with the merger.
      However, the personnel cuts are also in preparation for economic uncertainty expected in the coming months; the ultimate aim of the arrangements is greater cost-efficiency.
      According to Vehviläinen, the decision to close down the Espoo factory was arrived at in order to improve the efficiency of the chain of logistics. Production needs to be concentrated, and as close to the customer as possible. “Espoo would not have been a big enough factory to produce such integrated work for the European market. In Bruchsal [Germany] it was possible to expand so that could be done”, Vehviläinen says.
     
Nokia Siemens Networks has had a difficult time getting started.
      Vehviläinen admits that personnel cuts and continued changes have taken a toll on staff morale.
      “Operations of this size are difficult for everyone. So many things are changing around the staff”, Vehviläinen says. “It is obvious that it causes uncertainty and concern among all of us as individuals. This has been seen quite clearly.”
     
The chief shop stewards at Nokia Siemens Networks were astounded to learn that the company plans to shut down a factory operating near the company’s head office at one go. “We were ready for continued co-determination talks, but this factory decision came as a surprise”, says Yrjö Leinonen, the chief shop steward for the company’s office staff.
      Leinonen speculates that the closure of the factory is not merely an internal cutback decision, and suggests that the company is showing the way for others, in moving production in a situation in which the economy is declining.
      “The message is negative. In this situation, social responsibility should have weighed more”, Leinonen complains.
      He says that those who are being let go will probably find it difficult to find new jobs any time soon. The situation will be especially difficult for those many people who are about 50 years old.
     
Also surprised was Kyösti Lunkka, Metalworkers’ Union shop steward of the factory workers who are paid an hourly wage.
      “The closure of the factory was a shock that nobody was expecting.”
      “We had previously been assured that there are customers who specifically prefer Finnish to Chinese work. It seems that this was not enough.”
      This is the first time that blue collar workers at NSN are being affected by cutbacks. Previous reductions have affected white collar office staff.


Previously in HS International Edition:
  Experts predict Siemens will leave Nokia-Siemens Networks (14.12.2007)
  Nokia Siemens Networks debuts at Barcelona 3GSM Congress (13.2.2007)
  Announcing record result, Nokia reiterates faith in Siemens deal (26.1.2007)
  Nokia and Siemens postpone merger over corruption investigation (15.12.2006)

Links:
  Nokia Siemens Networks
  NSN Press Release: "Nokia Siemens Networks enters final stage of synergy-related headcount restructuring"