Software giant Microsoft announced on Friday, February 27th that it was closing two Nokia smartphone factories located in China as a part of its ongoing restructuring efforts. The plant closures will result in around
A Microsoft spokesperson noted that the plant closings are part of the restructuring announced last July. “The timing of actual departure was staggered due to local and legal requirements,” he explained to the Seattle Times.
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More on the Microsoft – Nokia closure announcement
Company sources note that a good bit of the manufacturing equipment in China will be moved to factories in Vietnam, the report said, with the plant shut downs and equipment transfers projected to be finished up by the end of March.
The China plant closures are part of Microsoft’s restructuring announced last year, which will involve the elimination of 18,000 jobs worldwide, with 12,500 of these jobs from Nokia.
Of note, since purchasing Nokia’s phone operations back in April for $7.2 billion, the tech titan has laid off half of phone company’s 25,000 employees and shut down several Nokia facilities.
The firm is also gradually phasing out Nokia as the brand name for its Lumia smartphone models and has started selling phones under the Microsoft brand.
The move means most of Microsoft’s smartphone production is now in Vietnam, as is the case with many global smartphone manufacturers today.
Rapid economic growth has pushed wages higher in China, which means manufacturers are moving operations to Southeast Asia nations (especially Vietnam and Cambodia) where wages are lower.
For now, Nokia plants in Manaus, Brazil and Reynosa, Mexico, have managed to avoid closure.
Microsoft CEO Nadella on Microsoft restructuring
Microsoft CEO Satya Nadella said earlier that the firm is moving its focus to mobile devices, cloud computing and productivity software.
“Microsoft’s restructuring plan reflects dramatic shifts in the global mobile phone industry, given the short product life-cycle and high product turnover rate in recent years,” Nadella noted. “The advent of the smartphone era has also seen a number Chinese phone makers produce a diverse range of quality smartphones in addition to global brands like Apple and Samsung.”