Nokia to close Komarom plant

July 19, 2014


Some 1,800 people will lose their jobs at the Nokia plant in Komárom, which Microsoft has decided to close after acquiring the Finnish handset business recently. The US company plans to fire 18,000, or 14%, of its global workforce over the next year, mainly at Nokia units, as part of a global restructuring. The lay-offs at Komárom, which is on Hungary’s border with Slovakia, will begin in September and the unit, which opened as a greenfield development in 2000, will close in November, as production moves to Asia.

According to foreign affairs and trade state secretary Péter Szijjártó, the government has prepared a five-step plan in response to the dismissals. The Hungarian investment agency is in advanced talks with three international companies that will invest and create jobs in the town, he added.

One of those companies appears to be Audi Motor Hungaria who told local media on Friday that it “will certainly find the opportunity to make an attractive offer for the adequately skilled labour”.

Szijjártó added the government “will tighten cooperation” with Microsoft to increasingly make Hungary a research and development centre. Under an existing agreement, Nokia’s R+D centre will employ 150 engineers. A retraining programme will also be launched, he said.

In its heyday the factory at Komárom employed 10,000 people, including contractors. However after Nokia’s years of market dominance, a slew of unsuccessful and eccentric products saw it slip behind Apple and Samsung as the smartphone era arrived. The most recent dismissals in Komárom came in 2012, when Nokia laid off 2,300 employees. Last year Nokia Hungary posted revenues of around EUR 1 billion, a huge drop from EUR 3.6 billion in 2010. Komárom will be hit hard, as a large part of its local business tax revenues will leave town with Nokia.

Meanwhile the memo written by US Microsoft executive Stephen Elop that buried the news of the upcoming dismissals deep in the 11th paragraph of a dry corporate text went viral on social media on Thursday. Microsoft recently acquired Nokia and its approximately 25,000 employees for USD 7 billion. Half of the former Nokia employees will now be sacked as Microsoft works on a programme of “synergies and strategic alignment”.

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