Nokia’s Hardships Take Toll on Finnish Economy

Nokia’s stumbling performance is slowing the economic growth of Finland, with exports of mobile software and services from the world’s largest phone maker down last year.

Service exports fell 7 percent in the country, and even though exports of goods increased 10 percent the overall economy grew a lower-than-expected 3.1 percent. Meanwhile, the Espoo, Finland-based phone maker aims to regain market share under new management. Earlier last month, it announced plans to team up with Microsoft and adopt Windows Phone as its main mobile operating system.

In the process it is abandoning the MeeGo, which it was developing with Intel, as well as phasing out Symbian, its own longstanding operating system. That translates to potentially massive layoffs, many in Finland. Nokia will cut jobs among 6,500 research and development positions and some 3,000 employees work on the beleaguered Symbian OS. The company currently employs 19,840 people.

“This is the biggest structural reform which has ever impacted new technology in Finland,” said Mauri Pekkarinen, Finland’s economy minister. The government will try to help people find other jobs, while unions are demanding severance packages of 100,000 euros, or around $138,000, per employee.

Nokia is struggling to compete with more robust mobile platforms like Apple’s iOS and Google’s Android after failing to foresee shifting consumer demand from so-called feature phones to smartphones. Although Nokia has lost market share, particularly in the U.S., and is being squeezed at both the low and high ends of the market, it remains the world’s largest phone manufacturer by units sold.

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