Microsoft finds a country rising up as it takes the axe to Nokia
The depth of the job cuts at the handset maker has caused fury in Finland
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Deputy Business Editor
Friday 18 July 2014
There was a time when Finland was Nokia, and Nokia was Finland. The country that spawned what can, without hyperbole, be called a revolution in the way we communicate was as proud of its mobile phone behemoth as it was of its ancient ice-shrouded legends and culture.
Nokia singlehandedly dragged this tiny country out of a seemingly hopeless recession in the 1980s and 1990s.
The company decided, while on the brink of collapse itself in the 1990s, to stake its future on the new technology standard for mobile communications known as GSM. Its scientists and engineers were thrown into developing both the technology and phones small enough and cheap enough for people to want to use.
It was not just the company doing all this, but the country too. When the technology was ready for the first GSM phone call, it was the prime minister who made it, with a nation watching on the TV news.
It is against this backdrop that the metaphorical public lynching of Stephen Elop –Nokia’s former chief and now head of devices and services at Microsoft – has to be viewed.
The US software giant bought Nokia’s handsets business, almost destroyed by Apple and Samsung, last year. Mr Elop – a top Microsoft executive before he joined Nokia, only to sell it to the Americans – had to announce 12,500 redundancies this week, most from the old Nokia business.
Now he has had to endure the wrath of Finnish unions and politicians who blame the US group for failing to indicate the extent of the cuts. “Very, very difficult from a human point of view,” said the Prime Minister Alexander Stubb, while local union leader Timo Pukinkorvaa expressed shock at the “massive” number of redundancies and the complete closure of Nokia’s research and development centre in the city of Oulu.
Others grimly reminded Microsoft of its apparent pledge to safeguard most Finnish jobs, when it said last September that there were “no significant plans to shift where work is done in the world as we integrate”. Hopes that Finland would become Microsoft’s European research base had been dashed, said the Opposition leader Juha Sipila.
Many of Nokia’s staff were less surprised. A lot of the best engineers had already quit for other groups, while graduates no longer consider Nokia to be the “must work for” company.
Luckily for them, Finland is producing another industry to take up some of the slack: video game making . But it seems unlikely computer games can provide anywhere near the export power of Nokia, which in 2000 accounted for a fifth of all Finland’s exports.
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