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Fri, 18 Jul, 2014 12:08:27 AM
FTimes-Xinhua Report, July 18

 

Global software giant Microsoft announced Thursday that it will eliminate up to 18,000 jobs over the next year in an effort to simplify the organization and integrate the recently-acquired mobile phone business of former Finnish handset maker Nokia.

Reports in Finland soon after the Microsoft announcement indicated that 1,100 Finnish ex-Nokians would lose their jobs, mostly in the northern technology city of Oulu, leaving mobile phone development centers in Tampere and Salo largely untouched.

The announcement marks the largest ever set of job cuts Microsoft has implemented in its nearly 40-year history.

Microsoft said that it expected the restructuring plan to be substantially complete by the end of 2014 and completely implemented by the end of June 2015.

The announcement likely came as a surprise for Nokia employees in Finland, which usually slows down considerably during the July vacation month. Union representatives contacted by Finnish media Tuesday said they had no prior information about the proposed cuts, hoping that they were a matter of mere speculation.

The job cuts mark what could be the final chapter in the saga of one of Finland's most storied corporate success stories in the mobile phone business.

The Finnish phone maker rose through the 1990s to become the most dominant force in the mobile phone market, commanding above an estimated 50 percent of market share by the end of 2007.

In 2011 when then-CEO Stephen Elop announced Nokia's strategic partnership with Microsoft for the Windows Phone platform, a full 20 percent of that market share evaporated.

The decline of the national icon hurt Finland where it matters most - Nokia accounted for a significant part of the government's and municipal corporate tax incomes - reaching just over 1 billion euros (1.35 billion U.S. dollars) in 2008 at the national level. So-called Nokia towns like Salo in southwestern Finland meanwhile depended on the company for 95 percent of its income tax revenues.

In its heyday Nokia was a major national employer, providing nearly 1 percent of the country's jobs. Plant closures like the one that took place in Salo two years ago when phone manufacturing was shuttered left large swathes of local communities without the anchor of a steady job.

Two years later, the same grim specter hangs over the city of Oulu.

 
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