Nokia Oyj said about 5,000 workers at its factory in the southern Indian city of Chennai accepted a voluntary retirement plan after the company failed to resolve a tax dispute in the country.
The retirements, accounting for about three-quarters of the facility’s 6,600 employees, were announced in a statement issued by an external public-relations company yesterday.
The factory makes handsets for exports and is among the largest at Nokia, which has sold its mobile-phone unit to Microsoft Corp.
Nokia, based in Espoo, Finland, joins several foreign companies, including Vodafone Group PLC, International Business Machines Corp and Royal Dutch Shell PLC, in disputing tax claims in India.
Nokia abandoned plans to include the Chennai plant in the sale of the handset business to Microsoft, completed last month, because of the tax spat with India’s government.
“I think they want to find a solution where they can get rid of the factory, since it’s not a business anymore for Nokia,” Hannu Rauhala, an analyst at Pohjola Bank PLC in Helsinki, said by telephone.
“There will be some writedowns for Nokia, but they won’t be important compared to their balance sheet,” Rauhala said.
Nokia introduced the program to support workers faced with uncertainties arising from the tax case and the non-transfer of the plant to Microsoft, it said in the statement.
The plan gives “employees the chance to seek new opportunities outside the company based on a firm financial footing,” Nokia said.
In March, India’s top court ordered Nokia to deposit 22.5 billion rupees (US$379 million) into an escrow account and agree to pay any taxes due by the Indian unit, before the company can transfer the Chennai factory to Microsoft.
“Nokia is keen to work with authorities in India to resolve the tax disputes,” Mark Durrant, a company spokesman, said in a statement on Wednesday.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by