Where now for Nokia employees?

After Nokia’s shock announcement two weeks ago that the company was going to slash its local operations by closing down its Jucu plant with the loss of 2,200 jobs, the Romanian authorities and the business community have accepted the decision as a natural move in a global market economy. However, the question remains what happens to the surplus labor force flooding onto the market?Last week, Nokia pledged to fulfill its obligations in Romania during a meeting with Sulfina Barbu, the Romanian labor minister.
“They assured us that discussions will be extremely fair and in the employees’ interests. They also said that for employees who go to work and fulfill their obligations, the treatment will be European, civilized and with care for the people. If there are cases in which employees do not come to work or respect the program, those people will face the consequences,” said Barbu.
The minister also discussed the option of accessing EU funds for the Nokia plant’s employees with the County Employment Agency (AJOFM) and the company’s management. The government intends to obtain funds via the European Globalization Adjustment Fund (EGF) to support the employees after the plant closes. Romania must put up about 30-35 percent as co-financing to access the fund, PM Emil Boc said.
The Finnish company announced two weeks ago that it would close down the Jucu plant by the end of the year, a measure which will see the mobile phone giant slash 2,200 positions in one fell swoop.
Upon the opening of the plant, Nokia committed to make a EUR 60 million investment in the plant in Jucu, Cluj, starting production in 2008. The factory in Romania was opened after Nokia’s controversial relocation from Bochum, Germany.
The company broke the news to its employees via an internal letter in English which said the measure was “painful but necessary.”
“We plan to ramp down our manufacturing facility in Cluj, Romania, by the end of 2011. We are aligning our manufacturing in Europe with consumer behavior in Europe. Specifically, smartphone sales in Europe have increased while feature phone sales in Europe have decreased, and the majority of our work in Cluj has been around feature phones manufacturing,” said the company.
Nokia is looking for potential investors interested in buying the Jucu plant, said the president of the group, Stephen Elop.
During this time, the company will keep on in Jucu only the employees of the sales department. The rest of the staff will be made redundant.
Nokia workers were informed that they will remain in the employ of the company until the end of the year and will be paid until the end of March 2012. The laid off staff will also receive a compensation package that will be finalized after consultations with the employees’ union and company management.
“In real terms, the effect of the layoffs on the labor market is 1 percent of the total number of employees in Cluj. Of course, we must not forget that Nokia has significantly used temporary work and this plant has involved a series of suppliers who may also have to close down those business lines that are closely connected to the activity of the plant,” Bogdan Dragoescu, senior business development manager at Smartree, tells BR.
And that is not all. He adds that Cluj has “a good economic structure, with the production and services areas being balanced. The bordering counties are oriented especially towards production, so in principle, a 100 kilometer radius should be capable of absorbing the Jucu employees.”
Still, the questions remain. How will the labor market cope with more than 2,000 people made redundant at the same time? Additionally, what employment options do these people have?
First of all, HR pundits do not think the lay-offs will be made at the same time.
“Nokia is likely to support the 2,000 employees, one way or the other. Any closure is scheduled to take place in stages and the staff reduction will probably be gradual,” predicts Dragoescu, adding that such projects are ‘”carefully structured so that the social impact is minimal.”
Other experts in the field seem to agree.
“If we also take into account that some of the employees are from counties such as Mures, Salaj and Bistrita, as Viorel Gavrea, GM of the Tetarom industrial park has said, then the impact will not be very high at the level of the local labor force, especially since it will be dissipated at regional level,” Oana-Maria Banu, product marketing manager at MyJob, tells BR.
Cluj is ranked in third or fourth place (after Bucharest, Timisoara and possibly Brasov) in the list of cities with the highest number of jobs available.
At the moment, there are 670 offers in Cluj-Napoca, which total 4,079 vacant positions, data from BestJobs show. “We can also take into account neighboring regions such as Targu Mures, with 2,546 jobs, as well as Alba Iulia (2,401 positions) and Bistrita (2,142 positions),” Monica
Cacina, marketing specialist at BestJobs, tells BR.
Similarly, data from MyJob show that Cluj has advertised 1,432 vacancies over the last month. “If we talk about counties like Mures, Salaj and Bistrita, the number of open positions over the last month is 2,742,” says Banu.
While Cluj remains a developing region, most of those who were made redundant could be re-employed within 6-12 months, estimates Dragoescu. However, in the event of regional economic stagnation, it is possible that only a small percentage will get back into the work force, he forecasts.
It is important that re-employment options be approached appropriately. Specialists with higher education will need a different strategy than workers, explains Dragoescu.
For workers, their experience at Nokia has definitely improved their resumes. “Romania needs most of all production, and these people went to a ‘good school’ at Nokia. For this reason, they will be appreciated anytime in this field,” says Dragoescu.
Bogdan Florea, general manager of Trenkwalder, tells BR, “There continues to be demand in the area of assembly workers who have no particular qualification but can learn procedures and maneuvers in a reasonable time span. The car industry and the manufacturing industry are the main providers of jobs.”
In the case of highly educated specialists, “Nokia will count in their professional development and their chances of being hired, especially by companies, are pretty high,” says Dragoescu.
Relocation is also an option, especially since willingness to relocate has “greatly increased over past years, perhaps also because of the global crisis,” says Dragoescu.
“The not very remote regions in the western part of the country, where there are several large electronics plants, could benefit from this community of specialists trained at the Nokia plant,” he says.
Another alternative would be to change careers, switching to a domain with better job prospects. Data from BestJobs and MyJob show that the fields with the most acute staff shortages are management, electronic commerce, IT software/computers, retail/commerce, industry/production, telecommunications, media/advertising/PR/human resources and market research.

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