Market forces moved the cheese for the population of Salo, a town in the south of Finland, where Nokia (NYSE:NOK) — once the darling of the cell phone industry — employed 3,500 people to assemble its mobile phones that shipped worldwide. Now, Nokia is cutting jobs like crazy.
Hurt by crushing competition from Apple (NASDAQ:AAPL), Samsung, and a host of other manufacturers running their handsets on the ubiquitous Google (NASDAQ:GOOG) Android platform, Nokia has rapidly lost market share. The Finnish corporation soon had to resort to cutting costs by shifting its mobile phone assembly operations out of European countries to Asia. Germany, Hungary and Romania were on the block first, and Salo — Nokia’s main assembly unit — is now likely to see a 1,000 jobs cut.
The town is grappling with the changed circumstances: empty storefronts, high unemployment and a major deficit due to Nokia’s lower tax payments. Nokia once paid up to 60 million euros towards the town’s corporate income tax. Last year, Nokia paid only a sliver of that: 2 million euros.
In a morale-boosting effort, Finnish president Sauli Niinisto visited the town and assured support for the laid-off workers. “We won’t abandon our friends and we won’t give up,” Niinisto told reporters.
In small consolation, Salo’s mayor Rantakokko is grateful that at least 2,500 jobs remain at Nokia — mostly in the design and R&D departments. “The layoffs are a bitter blow but we can’t let it get us down,” Rantakokko said. “Nokia will still have 2,500 workers here and will remain important to us. There is a technical pool out there, soon out of work, and the challenge will be to find a use for it,” he added.