Finnish government to fast track €300 million growth package following Nokia job cuts

Finnish government to fast track €300 million growth package following Nokia job cuts

Meeting yesterday to discuss the potential fallout from Nokia’s job cuts affecting 3,700 domestic employees, the Finnish government has said it will push forward the implementation its €300m ($379m) growth package to encourage entrepreneurship and assist with the re-employment of top experts in the country.

Yesterday, Nokia announced that it is slashing 10,000 employees worldwide by the end of 2013 — 3,700 in Finland alone — as it seeks to cut costs and adapt its strategy to focus on its smartphone and location-based businesses. As a result, the Finnish government moved to prepare structural changes to assist and support new companies formed by people who had been cut from Nokia’s workforce.

The government had already set aside a €300 million growth package in its Spring budget over the course of its four year term, including tax incentives for research and development and private capital investments.

Nokia’s 3,700 Finnish job cuts and a further 2,000  by Nokia Siemens Networks have ensured the government may need to expedite the implementation of such funding and push ahead with its plans a lot more quickly. In fact, the government says that “the measures to boost innovation and investments, adopted as part of government discussion on spending limits, will be subject to a fast track process.”

Finland’s Ministry of Employment and the Economy explains the measures:

The measures to boost innovation and investments, adopted as part of government discussion on spending limits, will be subject to a fast track process. The measures will provide considerable opportunities for growth in various sectors and promote ways to harness the potential freed up from the ICT sector. In addition, work has already been initiated to rapidly implement measures required to deal with the structural change. Resources of the Finnish Funding Agency for Technology and Innovation Tekes will used in channelling expertise to other sectors and in the reorganisation of public services.

Key measures are set to be enforced following the governments next budget session in August. With Salo (a development and manufacturing plant for Nokia) already classified as an area of abrupt social change following cuts by the company, another key town in which the company operates — Oulu — could also given the classification.

Antti Vilpponen, CEO and co-founder of ArcticStartup, a technology website covering technology startups and growth entrepreneurship from the Nordic and Baltic countries, believes that it might not take too long for former Nokia employees to find new jobs, telling The Next Web: “While the €300 million won’t be direct financial investments into startups, it is a step into the right direction in creating a diverse, high growth and ambitious growth company ecosystem in Finland.”

“The Finnish Ministry of Employment and Economy carried out a study between the years 2007 and 2009 where it found out that about 100,000 new jobs were created in Finland. Half of those were created by high growth businesses. If this speed is kept up, the 3700 new jobs (the same amount Nokia will layoff in Finland) will be created in a mere 40 days. All this highlights the importance of a diverse, high growth and ambitious startup environment for future financial and societal stability,” he added.

By cutting staff numbers, Nokia hopes to reduce expenses in its Devices & Services division by more than a billion Euros in the next year, having already saved approximately 700 million Euros by the end of the first quarter of 2012.

In total, Nokia says it will save more than 1.6 billion Euros by the end of 2013.

[Image Credit: FlickrNeil Bird]

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