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Nokia cuts 4,000 as it moves manufacturing to Asia

Factory workers in Finland, Mexico, and Hungary will lose their jobs this year as Nokia follows its peers to tap into Asia's manufacturing might.

Nokia makes 365 million phones a year, and now will make them in Asia.
Nokia makes 365 million phones a year, CEO Stephen Elop said in 2011, and now will make them in Asia.
Stephen Shankland/CNET

Nokia plans to cut 4,000 jobs as it moves manufacturing to Asia, the ailing mobile-phone company said today.

The cuts will take place this year at factories in Komarom, Hungary, Reynosa, Mexico and Salo, Finland, though the factories will continue some work.

"Shifting device assembly to Asia is targeted at improving our time to market. By working more closely with our suppliers, we believe that we will be able to introduce innovations into the market more quickly and ultimately be more competitive," Niklas Savander, Nokia's executive vice president of markets, said in a statement.

Asian countries such as Malaysia, Thailand, Taiwan, and most notably China have become powerhouses of manufacturing, offering not just relatively inexpensive labor but also increasing levels of industrial and design expertise, engineering resources, and proximity to component suppliers.

The price is right, but harsh working conditions in China have become a public-relations mess for Apple, which uses contract manufacturer Foxconn to build iPhone and iPads. Apple is not alone in relying on Chinese manufacturing, though.

Nokia, under the new leadership of CEO Stephen Elop, has dramatically transformed already by scrapping its Meego and Symbian operating systems in favor of Windows Phone. Later this month at the Mobile World Congress trade show, it looks like Nokia will debut a new high-end Windows Phone model.

Nokia's three factories won't close, though operations are being scaled back. "They give us a unique ability to both provide customization and be more responsive to customer needs," Savander said.

For employees who lose their jobs, Nokia will offer financial support and help finding new local jobs, the company said.