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Finland Numbed by Nokia’s Travails

Once the pride of Finland, {complink 3847|Nokia Corp.} has lost its once-elevated position, not only in the ranks of the world's biggest high-tech companies but, more ominously, among Finns. Disappointed and hurt by the company's recent performance and actions initiated by the management to reduce operating costs, Finns who used to see Nokia as the pride of the nation are quietly uncoupling the image of their country from the world's perception of its best-known corporate entity.

Finns, who once proudly associated themselves with Nokia's heritage, nowadays view the mobile phone-maker as just another multinational enterprise. Finland and Nokia, it seems, may be parting ways. The country's headquarters will still be in Finland, but for Finns, this is no longer the iconic company they considered a national model.

Nokia was founded in 1865 and became the pride of a small nation with its transformation into the world's biggest mobile phone manufacturer. The company became a global leader and one of the strongest Finnish brands. With it, a strong sense of national pride was born, too. Nokia used to be the one and only brand in Finland. Today, Finns don't talk much about Nokia, and many even prefer phones from its biggest rivals, especially products from {complink 379|Apple Inc.}. What has happened?

To start with, many Finns have lost their jobs, thanks to the new reorganization strategy being implemented by Nokia. The company has contributed to an increase in Finland's unemployment rate, and with it, other social problems, including a perception of damage to the nation's image.

The new manufacturing plant in Vietnam recently announced by Nokia means a likely reduction in the number of employees in the Finnish product development centers in Oulu and Salo, a city that entirely spins around and totally depends on the company. (See: Nokia Plans for Growth Despite Dropping Sales .)

Last month, Nokia announced that it will lay off 1,400 employees in Finland — over five percent of its workforce in the country. There have already been 1,900 job cuts since last year. This is a huge loss for a country the size of Finland. With a population of 5.4 million at the end of 2010, Finland felt keenly the recent job cuts at Nokia, and future layoffs would seriously affect the society as a whole. Nokia’s suppliers in Finland will be affected, too, doubling the effects nationwide. No wonder Finns don't want to talk about Nokia.

Most of the Finnish press is very quiet about Nokia at the moment, partly because of the summer recess and also because Finns don't seem interested in talking about this painful subject. Some of the Finnish afternoon papers have written mainly about the bad stock market situation, or the dismissal of people in Nokia factories.

The Finns who shared some of their thoughts on Nokia with me agreed the company seems to have lost its meaning as a national icon. They feel they have lost the flagship that once made them proud. One Finn told me: “Nokia was considered a national crown jewel, and it is a bit of a shock for many that it actually is a multinational company with a non-Finn as a CEO. It's maybe a little comparable to the UK in the international politics by the time the dust of the Second World War had settled; amongst the winners, but definitely not an empire where the sun never sets anymore.” As a Finnish resident, I feel the same way.

The last straw would have been if recent speculations CEO Stephen Elop was planning to move Nokia’s headquarters to California's Silicon Valley had been true. When the reports first cropped up, there was a feeling of discontentment that could be felt in the streets of Helsinki. Nokia’s spokesperson dispelled the rumor. I was told Nokia's headquarters will remain in Finland and that there were no plans to change that. At last, some good news!

26 comments on “Finland Numbed by Nokia’s Travails

  1. AnalyzeThis
    July 18, 2011

    Can't say I'm too surprised by any of this… and part of this does seem to me to be classic “bandwagon” effect: when things are going well, people are enthusiastic and big fans and when things aren't going so well… not so much.

    I think it's hard for even the most die-hard Nokia fans to be very supportive nowadays. These are tough times.

    But if Nokia recovers and gets back on the right track, I wouldn't be surprised to see that Nokia suddenly re-emerged as a strong source of Finnish pride.

  2. HM
    July 18, 2011

    Nokia is a company that lives in a market that changes every moment. By change I meant it can go upwards from its current state in no time. Let us wait and see Finnish connection strengthen more next time 🙂

  3. Anand
    July 18, 2011

    “Finns don't talk much about Nokia, and many even prefer phones from its biggest rivals, especially products from Apple Inc”

    Susan,

     Thanks for the post. Nokia is indeed struggling to compete with companies like APPLE and Samsung. But do you think Nokia+windows + Skype combination will be able to compete with Apple and Samsung?

  4. Nemos
    July 18, 2011

    “The Finns who shared some of their thoughts on Nokia with me agreed the company seems to have lost its meaning as a national icon.”

    I can understand the sadness that Finns feel because of the rate of the layoffs that company does . Nevertheless, I cannot understand the national icon that Finns had for the Nokia and why it is important   to be the CEO from Finland or not.

  5. eemom
    July 18, 2011

    This is saddening in a way.  You never want to see a nation hurt by the decline of one company's sales and profits.  I knew Nokia was large in Finland but had no idea that it was considered such a national icon.  That's a big image to live up to in the wake of the recession.  It is unfortunate that Nokia had to layoff so many employees but I understand that they need to do what they must in order to improve their numbers.  I'm sure Nokia could have done things differently to begin with to prevent such a massive layoff.  It seems that it is the lowest person on the totem pole that feels the weight of the ax.

  6. Wale Bakare
    July 18, 2011

    Since the emergent of Android's technology innovation in the world market many high- tech firms especially phone makers have been struggling to cope with fiercer competitiveness in the market of smartphone.

    Indeed the latest development in whirlwind of smartphone industry may not be felt much until the next few years. Current situation with Nokia and its global headquarter – Finland,  far more than sad.

    In my opinion, if Nokia is relocating to California, it may be corporate office and production plant remains in Finland. Am i foreseen acquisition coming from Microsoft? Who knows?

  7. Daniel
    July 19, 2011

    Susan, you are right. Not only Finland peoples, every mobile phone users have the same feelings. Some time backs, “Mobile=Nokia”, that’s the equation they maintained by catering the market requirements. Now they are nowhere either in smart phone or basic phone market.  This may be due to mismanagement or some other reasons. Hope they will do something for their brand lovers and well wishers. 

  8. JADEN
    July 19, 2011

    It is a big blow on Finns, but NOKIA might take this decision because they are already felling the pinch of being left behind in the smartphone race.  With fall in their market share as they face strong competition from RIM, Apple, and Android, may be this is their means to focus on their future products.

  9. Jay_Bond
    July 19, 2011

    I can understand Finland’s current discontent for Nokia. With all these changes going on, laying off thousands of workers and then getting slapped in the face by having a new plant go up in Vietnam.  On the other hand, I do understand that Nokia's CEO is trying to save the company, and that means upsetting some people. Nokia is still a global player in the handset game, granted not as powerful as they were. In order to get back into the game they need to shake things up, even if it upsets some of their biggest fans, the Finnish people.

  10. Susan Fourtané
    July 19, 2011

    DennisQ, 

    Try to see it this way: If the top company of a nation is contributing to its home country's unemployment at the same time its creating 10,000 jobs somewhere else, the ones who lost their jobs are quite unlike to feel enthusiastic. 

    -Susan 

  11. Susan Fourtané
    July 19, 2011

    anandvy, 

    From the beginning of the Nokia-Microsoft deal I have seen it as a bad idea and expressed it in some comments on the boards here by saying “Nokia blue screen”. That is how I perceive it. 

    -Susan 

  12. Taimoor Zubar
    July 19, 2011

    @Susan: I feel that the Nokia-Microsoft deal might actually turn out to be a life-saver for Nokia. I think the problems Nokia is facing are related more towards the software/OS side where they failed to innovate and promote the platform for development of user apps. The hardware side has not really been the problem for Nokia. Considering this, I think Microsoft's Windows Mobile can be a great combination with Nokia's phones and it's likely that the resultant product will be a hit.

  13. sbovio
    July 19, 2011

    Thanks for this insight into the Finnish culture Susan! I'm part Finn but have never been to my family's “homeland,” so it's interesting to learn about how much of the country's pride is wrapped up in this company.

  14. prabhakar_deosthali
    July 20, 2011

    It is Natural! This happens in every field. Even in sports ! when your national team is winning competions abroad  all those players are your national heros and pride. As soon as they loose you throw rotten eggs at them on their arrival to the native land.

     

    In the current global scenario , no company can just stick to its national pride at the cost of its commercial downfall. If the company has seen no alternative in reducing jobs in Finland and employing people in Vietnam then ther must be the economics angle to it.

     

    If the Finnish people are so proud of NOKIA why can't they ask the Finnish govt to help this company come out of its current problems, the way US govt helped General Motors? (- GM being he pride of USA.)

  15. Susan Fourtané
    July 20, 2011

    prabhakar_deosthali 

    I strongly disagree with the comparison for being incongruent from my perspective. The only similarity that a company and sports team that are icons of a country can have in common is that they both can put the country on the map and that's all. 

    If a national sports team loses a game, it will not affect the citizens' jobs/economy/unemployment rate. A national sports team doesn't contribute to the economy of a nation. A company does. 

    In the particular case of Nokia, you need to go to the origins of Nokia and position yourself from a different stand point. To understand what Nokia has meant to Finland you need to try to see how Nokia introduced Finland to the manufacturing and international business world and how it evolved since then. How the company changed products and directions until it became a mobile phones company. This is not the story of a one more company. This is one of a kind story. It took me time to see and understand what Nokia really means. 

    I wish you could see it from a different perspective. Maybe it's time for a change. Maybe Nokia's golden time is over in the very particular way this country has lived it. However, I believe it's respectable how Nokia has been loved by Finland and that has to be respected, too. If the Finns feel disappointed about it, that has also to be respected. Even more than respected, it has to be listened to and understood.  

    -Susan

  16. Susan Fourtané
    July 20, 2011

    sbovio, 

    I am glad you found it interesting. I believe sometimes is good to have a cultural and background reference when discussing about big companies like Nokia. I believe it helps to understand some things better, or at least in a different light. 

    If you are curious about more cultural background here is the link to another story about Nokia. 

    -Susan

  17. Susan Fourtané
    July 20, 2011

    Taimoor, 

    If you are right, that is what Nokia needs. Of course the hardware is not the problem but do you think Microsoft has enough experience in developing mobile software or is it just the Windows name what is counting here?

    I have read somewhere about the new “Microsoft Windows phones” instead of “Nokia Windows phones”. It really makes a difference. So, what is going to be the leading company: Nokia or Microsoft? Or should it be Nokia-Microsoft Wndows phones? Or it will depend on how many Nokia's stocks Microsoft buys? 

    -Susan 

  18. Susan Fourtané
    July 20, 2011

    Jay_Bond, 

    Don't you think a national company should first give jobs to the locals instead of taking the jobs from them and then go and create 10,000 jobs somewhere else? That is not expanding, as it was said at the beginning. That is called something else. 

    This is not about being fans or not. This is about people and their jobs to sustain their families. 

    -Susan 

  19. Susan Fourtané
    July 20, 2011

    Wale, 

    If Nokia would relocate in California that would mean the end as a Finnish company. Where have you seen a national company that keeps its headquarters in a different country? That would mean that Microsoft has then bought the company, right? 

    For now Nokia says there won't be any relocation. 

    -Susan 

  20. Susan Fourtané
    July 20, 2011

    eemom, 

    Thanks for your kind comment. One of my Finnish friends read the comments here and was impressed by yours. 

    “I'm sure Nokia could have done things differently to begin with to prevent such a massive layoff.  It seems that it is the lowest person on the totem pole that feels the weight of the ax.

    I believe it so. 

    -Susan 

  21. Jay_Bond
    July 20, 2011

    I agree that a national company should keep jobs at home, and never said I agreed with their move to Vietnam. I do believe they need to do whatever it takes if they still want to remain in business. I am curious about the new jobs in Vietnam and the layoffs that happened in Finland. Did Nokia even consider building this manufacturing plant in Finland as opposed to Vietnam? Was the cost of labor and utilities too high? I don't know how Finland’s labor situation is, I do know that in the U.S., particularly the Midwest unions prevail. And the union mentality has cost them thousands of jobs, particularly Michigan. They were overpaid for what they were doing, (even within their own industry in other states) and the companies needed to make cuts to stay in business. It was either keep your job with pay cuts, or the jobs go elsewhere so the company survives. Needless to say the jobs went elsewhere.

  22. eemom
    July 20, 2011

    Susan

    I believe it to be true too.  Too many times, companies don't plan correctly and when they are in trouble, the loyal people that have worked hard all along suffer the consequences.

  23. prabhakar_deosthali
    July 20, 2011

    Susan !

    Agreed ! May be the comparison with the Sports may not be appropriate here.

    But as I have said in my comment when a company becomes a national icon and a matter of pride for the whole nation, it is in the national interest that the government of that nations extend a helping hand in infusing capital into that company so that it does not have to relocate or sale its stake to some foreign company. Just by feeling sad and disappointed  does not solve the problem. Have the Finnsih businessmen ( other than Nokia ) or the govt made any efforts to retain Nokia's manufactruing plants in Finland ? that is the question.

  24. Mr. Roques
    July 22, 2011

    Well, I hate to read about Nokia… it's like seeing a tragedy in slow motion. I heard they are now the World's #2 phone company and falling!

    Nokia should SERIOUSLY think about what's going on and make concrete decisions. Maybe go with Android, who knows!?

  25. Kanttila
    August 23, 2011

    Nokia has fallen to #5 in the mobile world and they made their new strategy by choosing Microsoft and Windows Phone as their operating system. It is undersandable that big changes like that are not ones bringing in the results immediately. The problem is that both Elop (the new CEO) and Ollila (ex-CEO before Kallasvuo and current Chairman of the Board) have both given statements that are not ones ANY executives should give. Both have in fact told in public that the products are inferior and/or the capabilities of Nokia software engineers are not up to par with the competition. Both statements are loads of bull.

    Nokia's biggest problem has been the Symbian, it is Os that has been kept alive with “duct tape repairs” and the technology is old. This is something what Windows used to be: lot of old obsolete waste-code within and new features quickly added on top. Latest Symbian version, Anna, is the swan song of the OS. It is best version of the “modern Symbian”, but still far from the competition, Android and iOS.

    Maemo/MeeGo Could have been the savior from within Nokia, but Elop thought it was safer to outsource the OS development to Microsoft. It makes sense in a way, since the Maemo/MeeGo lost its prime due to internal disagreements and other less than desirable human feelings. All in all Meaemo/MeeGo never got the chance it deserved.

    Right now Nokia faces BIG challenges: they have announced N9, the first and last Maemo/MeeGo device, and it will be in stores… …who knows when? Nokia’s big problem is long delivery time from the announcement date. At the same time there are rumors that many other Windows Phone manufacturers will announce their WP7 Mango devices in a week. This should be alarming, since Nokia is expected to announce their WP7 Mango devices in October the earliest and they will be on sale some time in 2012 Q1. If not even later.

    I think you see a pattern here. No wonder the company is in distress. I still hope they can turrarely make agile and fast when combn the ship, become more agile and faster to response. I could write a book about this topic and still hope for better future. Still, Nokia and Microsoft have all the recourses for mobile world domination, they just need to find a way to utilize them. Two big ones ined.

  26. Mr. Roques
    September 6, 2011

    How do you see this playing out? … I'd hate to see such a great company go to Chapter 11! 

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