For phone maker Nokia Corp., 800 jobs will bite the dust as some of its production gravity moves out of the United States.
In the same week it announced a record profit and reiterated warnings about handset sales, the Finland-based company said it is shifting some of its U.S. manufacturing in North Texas to Korea and Mexico to toughen its competitive muscle.
Nokia said it made the decision because Korea, Mexico and Brazil have been the hub of increased manufacturing for the Americas region.
“In recent months, we have increased the capacity of our factories by installing newer machinery and improving our manufacturing processes,” said K-P Wilska, president Nokia Americas.
The company said it also was responding to strong demand for its products.
Employee layoffs will be carried out during the next five months, said Nokia.
“We have not identified the specific people who will be affected,” said Jim Bowman, vice president, corporate communications for Nokia Americas. He said the company will hold meetings with the staff and advance notices will be issued to the workers.
He said the shift to Mexico and Korea is due to “overhead and operating costs,” stressing that inexpensive labor abroad alone was not responsible for the decision.
The operations in the Dallas-Fort Worth metropolitan area now will focus on more engineering support for the Americas and cater to the U.S. market. The facility will continue to manufacture mobile phones.
The company has 5,500 employees in the area.
In tune with its fourth-quarter report, Bowman said outsourcing is not part of the new move.
“We have yet to see those who can do it as we can,” he said.
Competitor L.M. Ericsson outsourced its phone-making business two weeks ago to concentrate on what it considers its technological strengths.
