Struggling Nokia downsizes in move to London

Paddington to be the platform for a fresh attempt to revive the fortune's of the Finnish mobile firm

Mobile phone giant Nokia is to move its head office to London as part of the turnaround of the struggling Finnish firm.

Nine months ago its chief executive told the phonemaker's staff that they were "standing on a burning platform" and would have to jump into the "icy waters" below. The company is making 4,000 job cuts globally and as part of the restructuring it will close its large head office in Farnborough and relocate to to an office in Paddington in central London. Staff were told of the latest restructuring decisions in London last week.

But it has emerged that Nokia is close to selecting a 60,000 sq ft office near Paddington station. The development at Kingdom Street is already home to mobile phone network operators Vodafone and Orange as well as retailers Marks & Spencer and Kingfisher.

Nokia is in the middle of a turnaround and following the job cuts it launched last week a new phone – the Lumia 800. The phone has been well received but Nokia has a long way to go. Before the launch of the iPhone in 2007, Nokia was the main provider of mobile phones in Europe. It remains the world's biggest mobile phone manufacturer but its global share of sales last year fell below 30 per cent for the first time. It has to compete with Google's Android offerings alongside Apple's iPhone.

Nokia teamed up with Microsoft in an attempt to keep up in the fast-paced tech telecoms world and the Lumia 800 is the first product from the tie up. It has also announced it will launch a tablet rival to Apple's iPad that runs on Microsoft's Windows platform in the summer of 2012.

Nokia's design team is already in a small office in Soho. But Nokia hopes the move to Paddington will boost its credentials in the tech telecoms world. The space is more expensive than offices outside London, but the smaller space – 60,000 sq ft to house up to 400 people – is less than a quarter of the size of its current office in Southwood, Farnborough. Nokia announced in April 700 of its 2,400 British staff would lose their jobs.

It had originally looked at alternative offices in Woking, Weybridge and Stockley Park near Heathrow, but it decided central London would improve the calibre of people it could attract to the firm.

But it has snubbed Tech City in East London – the area promoted by the Government for technology companies to move to – an area that stretches from Silicon Roundabout at Old Street eastwards to Stratford.

Nokia is not the first business to turn down the East London area. Telefónica, Europe's largest telecoms company, has preferred a central London location.

Despite the snubs by Telefónica and Nokia, Tech City has attracted Google, which has committed to opening a hub for start -ups.

Last week, Tech City organiser Kevin Eyres, a former European managing director of LinkedIn, published an appeal for at least 70 more mentors to add to the existing 30 to advise the infant tech enterprises in the area.

Nokia could not confirm details of the move but said that staff had only been told "a new location for UK employees will be found in London". A spokesman said: "Our choice is dictated by the design of the building, the surrounding area and facilities and good transport links."

CBRE advised Nokia.

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