Nokia lays off 3,500 employees

The company plans to close a factory in Romania and some operations in Germany and the U.S.

Nokia is planning to lay off an additional 3,500 employees, as the company continues to restructure after announcing its decision to focus on Microsoft's Windows Phone operating system.

The affected employees work in manufacturing, location and commerce, and supporting functions, Nokia said on Thursday.

In manufacturing, Nokia plans to close its factory in Cluj, Romania by the end of 2011, as the company's Asian factories provide greater scale and proximity benefits, according to Nokia. The company is also reviewing how to best take advantage of manufacturing operations in Salo, Finland, Komarom, Hungary, and Reynosa, Mexico. The planned changes will impact on the number of personnel in 2012, it said.

Nokia is also consolidating its location assets including NAVTEQ and Nokia's social location services operations. Going forward, Nokia will concentrate its development efforts in Berlin, Boston, Chicago and other supporting sites, while closing its operations in Bonn, Germany and Malvern, US.

The changes are painful, yet necessary, and will turn Nokia into a "more dynamic, nimble and efficient challenger," CEO Stephen Elop said in a statement.

The closure of the Cluj factory and related adjustments to the supply chain is estimated to impact about 2,200 employees. The changes in the location and commerce business are estimated to affect approximately 1,300 employees, according to Nokia.

The layoffs are in addition to the measures Nokia announced earlier this year. In April, Nokia said it will outsource Symbian activities to Accenture, transferring 2,800 employees to the company in the process, and cutting about 4,000 jobs.

Nokia is currently in a tough spot because sales of its existing Symbian-based smartphones have dropped faster than expected, and large volumes of Windows Phone-based devices aren't scheduled to arrive until next year.

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Tags business issuesconsumer electronicslayoffssmartphonesNokiaMobile OSesmobileWindows Phone

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Mikael Ricknäs

IDG News Service
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