Nokia said it would suspend handset manufacturing at its Chennai plant from November 1, citing termination of the services agreement with Microsoft.
The Sriperumbudur facility was one of its biggest plants globally.The plant was not part of Microsoft’s $7.2-billion acquisition of Nokia’s handset business due to a tax dispute with the Union government. Nokia is also facing a commercial tax case with the Tamil Nadu government.
Nokia had earlier stated that the plant would continue to operate as a contract manufacturer for Microsoft.
It also said it was now evaluating options to minimise the impact on existing employees at the Chennai manufacturing facility. It will share further information once details have been finalised, besides informing all stakeholders, including the Labour Commissioner, of the suspension, the company said in the statement. Nokia had rolled out a voluntary retirement scheme and around 5,000 employees had opted for it.
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