Nokia to suspend production at Sriperumbudur plant

Nokia will suspend handset production operations at its Sriperumbudur facility from November 1 post termination of services agreement with software major Microsoft.

Due to the liens on the Nokia handset manufacturing facility in Chennai, the plant was left out of the Devices & Services deal with Microsoft, which closed on April 25, 2014. As a consequence, Nokia entered into a transitional services agreement with Microsoft to address its immediate production needs and keep the factory operational.

Microsoft has informed Nokia that it will be terminating manufacturing services defined in the agreement with effect from November 1, 2014.

In absence of further orders from Microsoft, Nokia will suspend handset production at the Sriperumbudur facility from November 1, a company spokesperson said in a statement.

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.

Nokia will be informing all stakeholders including the Labour Commissioner of the suspension.

Nokia is currently evaluating options to minimise the impact on existing employees at the manufacturing facility. It will share further information once details have been finalised, the statement said.

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