Cash-Strapped Nokia Looks To Cut Jobs At Its Chennai Facility | TechTree.com

Cash-Strapped Nokia Looks To Cut Jobs At Its Chennai Facility

The one year contract manufacturing agreement for Microsoft looks more like a deadline.

 

In a landmark deal, Nokia last week sold its devices arm to tech giant Microsoft for a sum of $7.5 billion, which excluded the company's troubled India unit. While Nokia's factory in Chennai would continue to manufacture phones for Microsoft, the management has informed the workers' union about its need to trim 'excess manpower'.

 

In a meeting with union representatives on Wednesday, Nokia's management expressed its need to reduce operational costs. "The management told us there must be reduction in workforce. We have categorically dismissed the idea,” said A Soundararajan, President of the Nokia India Employees Union, according to a Times of India report.

 

The company had announced an employee separation scheme last month, but it has been rejected by the union. Soundararajan added that the Nokia management has been informed that none of the union members will accept the scheme, given that protection of jobs is paramount.

 

Nearly 744 trainees at Nokia's Chennai plant have opted to take the severance package and exit the company, while the plant's more than 5,000 strong permanent workforce has rejected the offer. The contract between Nokia and Microsoft for manufacturing phones at the Chennai plant will be for a year, with the option to renew.

 

"Nobody knows what happens after one year. They have no answers. Employees are panic-stricken," said Soundararajan. "We are exploring several options. One could be a government-mediated job assurance. It is still premature."

 

It seems as though Nokia is looking to keep the Chennai plant alive in the hope that it will receive a favourable ruling from the Supreme Court. The government's role in the decision could also affect the outcome and hopefully save thousands of jobs.

 

If the facility is freed from litigation, the unit changing hands from Nokia to Microsoft could still be a possibility. The one year manufacturing contract can be too easily seen as sort of a deadline, after which the plant could be shuttered.


TAGS: Mobile Phones, Nokia, Chennai facility, Microsoft, Contract Manufacturing

 
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