Nokia To Close Germany Plant, Cut Up To 2,300 Jobs

Nokia (NYSE: NOK) has announced plans to close its Bochum, Germany plant by the middle of this year and may cut up to 2,300 jobs, citing lack of competitiveness at the site, reported Reuters. The company will move production to existing plants, mainly in Romania, as soon as Q1, and board member Veli Sundbaeck added that labor costs at the Bochum plant were almost ten times higher than those in Romania. EQ Bank analyst Jari Honk explained that “Germany is an expensive country to ramp down a plant or lay off staff,” adding that the closure likely would be a more costly move for the company in the short term, but a “smart move” in the long term.

The downsizing is not the first one in the country’s telecom manufacturing industry, nor is it the only one in Nokia’s plans. About a year ago BenQ Mobile was forced to lay off 3,000 employees when it declared bankruptcy and Nokia Siemens Networks has previously said it would cut 9,000 jobs, 2,290 of which would be cut in Germany, by the end of 2010. Nokia also intends to sell its automotive accessory business and is in talks with Sasken Technologies to sell its adaption software research and development unit.

Shares in Nokia were down 0.46 percent at 23.56 euros ($34.84) this morning.

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