Finland to become Microsoft's mobile R&D hub after Nokia buyout

Microsoft's outgoing CEO Steve Ballmer claims there's no plans to move work from Europe to the US after its buyout of Nokia's devices and services business.
Written by Jo Best, Contributor

Nokia has been in Finland for over 150 years and at its peak contributed around one-quarter of the country's GDP. Now, with Microsoft poised to buy a substantial chunk of the company, what will become of its Finnish operations?

Under the deal, announced on Monday, Microsoft is to buy Nokia's devices and services unit for €5.5bn, with Nokia's other businesses -- its Here mapping outfit, NSN, and its Advanced Technologies unit -- to become a separate company.

According to the pair, all of Nokia's 4,700 Finnish employees who work in devices and services will be transferred to Microsoft, and the country will become a new centre of mobility for the company.

"Finland will become the hub and the centre for our phone R&D," Steve Ballmer, Microsoft's outgoing CEO, said in a press conference today.

"We have no significant plans to shift around the world where work is done. We want it done where it is done today," he added.

According to Ballmer, what happens in Finland will reflect what has happened elsewhere in Europe where Microsoft has made significant purchases, citing the examples of Skype in Estonia and Navision in Denmark, where Microsoft has maintained sizeable presences post-acquisition.

Ballmer said the company will make new investments in Finland, announcing the opening of a new $250m datacentre in Finland to serve customers in Europe.

Despite the promises of both Ballmer and Steven Elop, the former CEO of Nokia and now its EVP of devices and services, that Nokia's staff will be "inventing the next mobile phone right here in Finland" unions have already begun querying how much job security those moving to Microsoft can expect, fearing that jobs will move away from Europe to the US.

While Nokia's global headcount has shrunk considerably in recent years -- from 128,000 when Elop became CEO to around 88,000 now - it's the devices and services business that Microsoft is acquiring that has been hardest hit, falling by around a third in the last year alone.

NSN and Here -- two of the businesses that will form what remains of Nokia -- have also seen personnel levels drop, with around 56,000 staff between them now.

Those 56,000 will remain as part of a Finnish company, whose interim CEO is Risto Siilasmaa.

"As a result of the agreement today, instead of one Nokia there will be two global technology companies in Finland, both financially stronger and capable to invest in the future," Siilasmaa said today. "This can be an important accelerator in the broader Finnish economy."

According to the interim CEO, all of the three businesses that will make up Nokia in the future are currently profitable. The company is now looking for a full-time chief exec.

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