Microsoft adds further blow to Finnish economy with closure of Salo facility

Last year, when Microsoft completed its purchase of Nokia’s handset division, they promised to hire more staff at their Finnish manufacturing facility.

Fast forward a year, and Microsoft has just confirmed that will be closing their factory in Finland, leaving 1,100 people without jobs.

Reuters report that move is a further blow to Finland’s economy, who has been in a 3 year recession following other challenges, including sanctions on neighbour Russia, and earlier lay-offs by Nokia as it was itself fighting to stay afloat.

Microsoft’s unfulfilled promises are of course understandable in the face of the challenges the company itself was facing in the smartphone market, something Antti Rantakokko, the mayor of Salo, appeared to appreciate.

“My staff and I have been closely following the death curve,” he said, referring to the decline in recent years of Windows’ share of the global smart phone market to just 2-3 percent.

Two Finnish sites, in Espoo and Tampere, will remain open, but of its 3,200 employees in Finland, only 900 may survive after negotiations between Microsoft and Finnish employees, expected to start later this month.

“We were of the impression that Microsoft would give its phone business a bit longer to see if it can grow,” said Aimo Leskela, a trade union shop steward and 30-year veteran at Nokia.

Microsoft’s new plans are of course to outsource its manufacturing to Chinese ODMs, with companies like Foxconn and Compal expected to benefit.

Ironically Salo residents hold some hope for Nokia’s return, with the company recently announcing its return to the smartphone market at the end of 2016.

“Nokia’s return to Salo would be ideal,” shop steward Leskela said. “We could just change back the signs on the door,” another shop steward Mika Paukkeri added.