CASE8

CASE 8: EXIT MANAGEMENT

What are employee seperations?

 An employee separation occurs when an employee ceases to be a member of an organization.7 The turnover rate is a measure of the rate at which employees leave the firm. Well-managed companies try to monitor their turnover rate and identify and manage causes for turnover. The goal is to minimize turnover and the costs of replacing employees.

Case A:Nokia closes plant in Germany and relocates in Romania

Without the slightest information or consultation, the Finnish management of the world-leading mobile phone producer Nokia announced the abolition of 4,000 jobs. The ETUC decided to revise the EU directive on European Works Councils (EWCs).

In particular, it must be guaranteed that companies cannot ride roughshod over European and national workers’ rights without sanctions. In any case it must be guaranteed that no layoffs or transfers can be carried out without prior thorough information and serious consultations with the workers’ representatives and their trade unions. 

 The EU Commission can thereby make a meaningful sign that it is not only concerned for a better business environment but that it also has the power to strengthen worker’s rights across Europe.

Case B: Nokia cuts 3500 jobs "to ensure profitability

Nokia informed employees of new, drastic job cuts on Thursday. A total of 3,500 jobs are to go. The plant in Cluj, Romania, which is just four years old, is to be closed by the end of this year. Meanwhile the fates of those in Hungary, Mexico and Salo, Finland hang in the balance.

The company's Executive Vice President of Markets, Niklas Savander, says the job cuts are intended to ensure the company remains profitable both now and in the future.

”It is impractical to manufacture products in Europe when one has fly all the components to Europe and then fly the readymade phones back to Asia,” he stated.

Savander confirmed the company planned to end the assembly of phones at the Salo plant and transfer operations to Asia.

Case C: Hundreds of Nokia's outsourced Symbian developers leaving Accenture

“Around 40 percent of those who were transferred have sought [the pay-offs],” said shop steward Sami Sallmén. “A majority of them have signed leaving agreements. That’s based on the survey we commissioned.”

 Sallmén says that there is now so little work that some Accenture employees are left twiddling their thumbs. The severance packages have been an agreeable offer for many outsourced developers.

Unions had criticised the outsourcing arrangement from the start. They had feared that Symbian developers—working on an operating system that was to be replaced by Windows Phone as the main smartphone platform for Nokia—would face a short career with their new employers.

Accenture management are keeping a low profile on the story. The company’s communications department explained by email that the lay-off programme is voluntary. It says that the packages have been offered to those former Nokia employees that have not yet found new responsibilities within Accenture. The company would not confirm how many former Symbian developers had left.


Source: Nokia C Nokia B Nokia A  Gomez-Mejia, L.R., Balkin, D.B. and Cardy, R.L. 2016. Managing Human Resources. Global Edition 8/E. Pearson. London. ISBN-10: 1292097248