How Nokia's Finnish homeland took the news of Microsoft cuts

With one in five Nokia staffers in the country now facing redundancy, politicians are calling on Microsoft to support outgoing workers.
Written by Eeva Haaramo, Contributor

After the news broke on Thursday that Microsoft was laying off over 12,000 ex-Nokians, including around 1,100 people in Finland, the mood in Nokia's home country has varied between angry, sad, and disappointed, if not entirely surprised.

"It can be said that we have been betrayed," Finland's newly-appointed finance minister Antti Rinne told the Finnish business daily Kauppalehti. "At the time of the Nokia deal Microsoft announced it is committed to Finnish expertise. Now it seems this commitment isn't fully met."

The feeling of disappointment is echoed in the northern city of Oulu, where Microsoft is shutting down a research and development unit which had been mainly responsible for developing software for feature phones. As part of the closure, Microsoft will lay-off the staff of around 500 there. It's a bitter pill for the city of over 200,000 inhabitants which prides itself on being an ICT success story.

"Of course it is a disappointment that this kind of unit will be shut down. It is a major blow," said the city's mayor Matti Pennanen."But we have to look forward and believe that we can get through this as well. We have great expertise in Oulu and now we have to find out together with Microsoft and others how this talented group of people can be re-employed."

The news didn't come as a complete surprise to Pennanen, as the future of the Oulu unit was left undecided when the Microsoft deal was announced last year. However, Nokia — the rest of company that Microsoft didn't buy — is remains in the city.

"What was good for Oulu then was that the deal strengthened the position of the NSN unit [Nokia Siemens Networksnow Nokia Networks] in Oulu which employs around 2,500 people," Pennanen said.

Microsoft's announcement comes only a few months after its acquisition of Nokia's devices and services business was finalised in April. Globally, Microsoft said it will cut 18,000 jobs, 12,500 of which be among the former Nokia division — roughly half of the entire business unit.  From 4,700 people employed in Finland, up to 1,100 will lose their jobs, which means roughly one in five employees in the country are facing redundancy. The final number of layoffs will be confirmed after employee negotiations are finalised.  

While Oulu is hit the hardest, the cuts will also affect Microsoft's Finnish headquarters in Espoo. The development of key mobile technologies will be concentrated in other former Nokia units in Tampere, which will work on high-end products, and Salo, which will look after the cheaper part of Microsoft's range. It's seen as one positive piece of news as there had been fears that more of the development work on Lumia phones could be moved outside Finland.

The focus is now on how to help the employees being hit by the layoffs, and Finnish politicians have been vocal about the need for Microsoft to step up and meet its social responsibilities.

"The least we can expect from Microsoft is that it'll participate in creating a similar programme and support package for the people made redundant now as was done for people laid off from Nokia," said Finnish labour minister Lauri Ihalainen in a statement.

"Oulu is currently still recovering from Nokia's previous redundancies, but it is believed that the city will be able to recover from this blow," said Heikki Kauppi, secretary general of TEK, the association of Finnish engineers. "Oulu hopes to attract new businesses, which can benefit of Microsoft's [formerly Nokia's] experienced specialist workforce."

In light of the redundancies, pressure will now intensify on Microsoft to follow through on its commitment to build a €250m datacentre in Finland. Rinne summed up the mood of the nation. Speaking to Finland's largest newspaper Helsingin Sanomat he said: "This promise has to be met."

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