Microsoft to cut 9,000 jobs at Nokia plants in China

Microsoft plans to shut down two former Nokia device manufacturing plants in China, which means 9,000 jobs will be lost in the latest round of cuts since it acquired Nokia in April 2014.

The closure of the plants, located in Beijing and the south-eastern city of Dongguan, were planned last year, according to Microsoft News.

Microsoft also plans to send some of the plant equipment to its manufacturing facility in Vietnam.

The closures and transfer of production capacity to Vietnam are expected to be completed by the end of March 2015.

In July 2014, Microsoft announced plans to cut 18,000 jobs in 2015, most of them at Nokia, which added 25,000 staff to Microsoft's payroll through the acquisition.

A Microsoft spokesman confirmed that the latest cuts are part of the restructuring announced last July.

“The timing of actual departure was staggered due to local and legal requirements,” he told the Seattle Times.

Microsoft said 12,500 professional and factory positions would be eliminated in the alignment of the Nokia business with Microsoft's main operations.

Microsoft chief executive Satya Nadella said the job cuts were, in part, aimed at moving Microsoft away from its core software operations towards its cloud computing business.

“We are not in hardware for hardware’s sake, and the first-party device portfolio will be aligned to our strategic direction as a productivity and platform company,” he said.

Nadella said the job cuts were part of plans to reduce the layers of management and accelerate the flow of information and decision-making.

“This includes flattening organisations and increasing the span of control of people managers,” he added.

The plant closures in China will put most of Microsoft’s phone production in Vietnam, which is in line with the current trend among global manufacturers.

Many are moving out of China, where economic growth has pushed wages higher, to countries in South-East Asia, such as Vietnam and Cambodia, where wages are lower.

Former Nokia plants in Manaus, Brazil and Reynosa, Mexico, have been spared closure. The Manaus plant is manufacturing Microsoft products, and Reynosa will be converted into a repair facility.