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©alain-juteau-dreamstime.com Electronics Production | March 08, 2012

Nokia cuts leading to a slow death

It sounds perhaps a little apocalyptic. The fact is that Nokia is the driving cog in a clockwork of industries that keep the city of Salo, Finland, ticking. With the layoffs that have occurred the situation is, to say the least, serious.
Salo may be the place where Nokia's withdrawal has been felt by most. Gradually more and more production has moved out and the number of employees at the plant has declined.

By February it became clear that 1'000 people may leave the factory. In a town of 55'000 inhabitants, that hurts, especially if you factor in the current unemployment which, according to Helsingin Sanomat, is around 11%. Now it may go up to 15%.

The problem is not only limited to the lost jobs at Nokia. For those let go by the company there aren't many other large employers in the technology industry to turn toward. Subcontractors have been hard hit by production displacement. Elcoteq's Salo factory closed three years ago. Printed circuit board supplier Aspocomp closed its factory in 2007 and left hundreds unemployed.

Surrounding this are the many more job losses that are more difficult to calculate, from the local lunch restaurant, or the large sports center and new city hall built in the the city's heyday.Revenues are not sufficient to cover the city's mandatory costs, writes Helsingin Sanomat. Tax revenues from business this year is around15 million euro. In 2010 it was 60 million euro.

There is hope that the employees will start new businesses. Another possibility is for foreign companies to establish themselves in the community. Right now a campaign is being run to seeking to attract businesses to the region. Empty rooms and a well-educated and skilled workforce are strong arguments for why Salo would be well suited.

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