Nokia closes down Romanian factory by end-2011 in restructuring move

Nokia's factory in Jucu, near the Romanian city of Cluj, will be closed down until the end of this year, according an official statement released by the company. Nokia will "focus its feature phone manufacturing on those locations with optimal proximity to suppliers and key markets. As a result, Nokia plans to close its manufacturing facility in Cluj, Romania by the end of 2011, as Nokia's high-volume Asian factories provide greater scale and proximity benefits," according to the company.

UPDATE 1: Employees of the Nokia factory in Jucu will continue to work until the end of 2011 and they will be paid until March 2012. The value of compensation packages is yet to be announced.

UPDATE 2: Nokia will allegedly move its factory from Romania to the Republic of Moldova as the group had financial issues, according to Romanian Communication Minister Valerian Vreme. More here.

The planned closure of the Cluj factory combined with adjustments to supply chain operations is estimated to impact approximately 2,200 employees. "The planned changes in the Location & Commerce business are estimated to impact approximately 1,300 employees. These personnel reductions are in addition to the measures announced in April and are expected to take effect by the end of 2012," Nokia has said. Nokia will offer employees affected by the planned reductions a comprehensive support program, it further said. Romania is not the only country affected by the move. "Nokia plans to concentrate its Location & Commerce development efforts in Berlin, Boston, Chicago and other supporting sites, and plans to close its operations in Bonn, Germany and Malvern, US," the company went on. The full press release here. Nokia's employees in Jucu have been summoned for a meeting on Thursday morning with some Nokia Europe managers. Several suppliers have also been announced to stop delivering materials to the factory for a couple of days. Nokia closed down its research and development center in Cluj earlier this year and laid off 120 employees. Nokia opened its factory in Romania in 2008, after seven months of works on building the factory. The factory opening in Romania was met with protests from workers in the Nokia factory in Bochum, who had seen their work cut due to the relocation. Nokia Romania ranks 4th in the top of companies in Romania based on their 2010 turnover. Nokia managed to achieved sales of EUR 1.6 billion in Romania last year, up 56 percent on the year before. With 1,552 employees, Nokia posted a profit of EUR 43 million last year in Romania, according to data from the Finance Ministry. The year before, its profit was of EUR 38 million.