Finnish mobile-device maker Nokia Corp. has started offering
voluntary buyout packages to its employees at its factory in
Chennai, India.
The factory, which currently has 6,600 full-time employees,
faces an uncertain future as Indian authorities have blocked it
from becoming a part of the sale of Nokia's handset business to
Microsoft Corp.
The asset freeze stems from a complex and ongoing tax dispute
between Nokia and Indian tax authorities. The dispute could leave
Nokia with a tax liability amounting to billions of dollars.
Nokia and Microsoft announced earlier this week that they had
received all the necessary regulatory approvals for closing the
sale of Nokia's handsets business to Microsoft. The deal, which is
worth EUR5.4 billion ($7.4 billion) and was originally announced in
September 2013, is now expected to close by the end of this
month.
A Nokia spokesperson declined to comment on what will happen to
the Chennai factory when the deal between Nokia and Microsoft
closes.
"We cannot speculate on future scenarios in that regard," he
said.
Meanwhile, he confirmed that Nokia has started offering
severance packages to employees who wish to leave Nokia's employ.
The scheme is a part of regular reviews that Nokia conducts on its
manufacturing strategy.
These reviews take into account "the predictability and
stability of the regulatory environment in the countries where the
company operates," Nokia said in a statement.
Labor unions for the employees at Chennai are opposing Nokia's
move and have petitioned the local labor commissioner to resolve
their concerns, said M. Saravanakumar, the president of the main
employee union.
The sizes of typical buyout offers vary between 300,000 rupees
($5,000) and 500,000 rupees ($8,300) based on its potential taker's
years of service at the factory, Mr. Saravanakumar said.
Nokia has said that all employees at Chennai are eligible for
the offer which will start Tuesday of next week.
Write to Juhana Rossi at juhana.rossi@wsj.com and R. Jai Krishna
at krishna.jai@wsj.com
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