Nokia Chennai unit put on ice

Chennai: Following the termination of its services agreement with Microsoft, Nokia announced that it would suspend operations at its Sriperumpudur facility from November 1. This has raised questions about the future of 1,100 people working at its factory presently.

With no further order inflows from Microsoft, the company said it was left with no choice but to put its operations on ice. “In absence of further orders from Microsoft, Nokia will suspend handset production at the Sriperumbudur facility from 1st November,” a Nokia spokesperson said.

In September 2013, Nokia announced it would sell its devices and services (D&S) business, including assets in India, to Microsoft for USD 7.2 billion by March 2014. The deal was completed on April 25 but Chennai facility could not be transferred to Microsoft after the company got entangled in a '21,000-crore income tax dispute with the Indian government which also was authoritieed to  freeze its assets.

“Unfortunately, the continuing asset freeze imposed by the tax department prevents Nokia from exploring potential opportunities for the transfer of the factory to a successor to support the long term viability of the established, fully functional electronics manufacturing ecosystem,” the company said in a statement.

Earlier in June this year, Nokia announced that over 5,000 of the factory employees had agreed to opt for a voluntary retirement scheme (VRS) introduced by the company a month ago. At present, about 1,100 employees, including 851 operators, have been left jobless.

According to the company’s statement, Nokia is currently evaluating options to minimise the impact on existing employees at the manufacturing facility.