EU and Finland blast Microsoft's huge Nokia cuts

The massive job cuts could affect up to 1,100 people who live and work in Finland

Technology trends and news by Steven Loeb
July 21, 2014
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Microsoft's big job cuts announcement late last week is not sitting too well with more than a few people. I mean, obviously the people who are losing their jobs, but also the Finnish government, and the European Union, are both quite unhappy with what Microsoft has done.

That is because the vast majority of the 18,000 people losing their jobs are from Nokia, which Microsoft agreed to buy last. Of the 12,000 Nokia workers that will suddenly find themselves unemployed very soon, as many as 1,100 of them work in Finland. Obviously that is going to have a negative impact on the country's economy.

"It can be said that we have been betrayed," Antti Rinne, Finland's finance minister, is quoted as saying to the Finnish business newspaper Kauppalehti. "At the time of the Nokia deal Microsoft announced it is committed to Finnish expertise. Now it seems this commitment isn't fully met."

Finnish Labor Minister Lauri Ihalainen also expressed his unhappiness with the cuts, telling Bloomberg, “Microsoft’s intention to reduce jobs also in Finland is the bad news we feared. The least that can be now expected is that it creates a credible support package to those it lets go, similar to what was done with those let go from Nokia.”

Also blasting the impact that these cuts will have is László Andor, the Commissioner for Employment, Social Affairs and Inclusion in the European Union. On the same day that the cuts were announced, Andor released a statement that essentially accused Microsoft of not caring enough about its employees.

"I deeply regret the significant job losses announced by Microsoft today because of the impact these will have on so many individuals, their families and the local communities they live and work in. All sectors of the economy are undergoing changes as technology develops and consumer demand evolves," he wrote.

"Company restructuring is a fact of life but it should be done in a socially responsible way, based on social dialogue and with due respect for applicable legislation on the information and consultation of workers and on collective redundancies."

While noting that Microsoft is helping its workers find employment elsewhere, he also called on the company to give them more training for their new jobs.

"The digital economy is moving so fast that even technology companies have to make significant adjustments. Therefore companies, governments and social partners need to get better at anticipating skills needs, and invest in people of all ages to improve their digital competences," Andor said. "Workers affected by today's announcement should receive support to re-train if needed and help to find a new job as soon as possible."

It should also be noted that these layoffs are not going to be cheap for Microsoft either: severance packages are expected to cost Microsoft between $1.1 and $1.6 billion over the next year, including between $750 and $800 in severance and related benefit costs, and another $350 million to $800 million in asset-related charges. 

Microsoft also said that the "vast majority" of the affected workers will be notified over the next six months. 

Vator has reached out to Microsoft, but the company had no comment.

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