Finnish Government calls out Microsoft for breaking promises for Nokia deal

[Bouzoo]

 

 

By now, we all know that Microsoft is laying off another 1,850 jobs in the phone business out of which 1,350 are in Finland. Naturally, the Finnish Government didn't like the news so it started calling out Microsoft for promises they gave when they purchased Nokia.

Some of promises included making Finland a hub and even building a data center which, goes without saying, won't be happening. Apparently, Microsoft was ready to invest 250 million euros back in August 2014 (which shows on it's own that something was off) for the center and those proved to be beneficial in other areas. A huge hit to the Finlands economy which is not the best at the moment. 

This is not the first layoff Microsot has done or is planning to do, they have cut 18,000 jobs out of which 12,500 were in Finland, after that it was another 7,800 jobs out of which 2,300 were in Finland and now it's 1,850 more with 1,350 in Finland. I'll let you do the math. Correct me if I got the numbers wrong. 

 

Of course, this is a huge thing, and the government is set to soften the whole thing as much as they can, including pulling Microsoft in the whole process as much as they can by the looks of it.

Quote

The government said it would have 'serious talks' with Microsoft over how the company could help those laid off to find new jobs.

"The company must bear as big a responsibility as possible over what they have done by laying off people," said Employment Minister Jari Lindstrom.

 

This looks to be the final nail in the coffin as the government is taking a much more aggressive stance after the one they had for the first layoffs which was, according to their FInance Minister at that time:

Quote

I’m a little disappointed in Microsoft, which said at the time of the Nokia deal that it’s committed to Finland. This isn’t commitment.

 

I cannot blame the government for reacting this way, in the end it's thousand of lost jobs after many promises of opportunities. My country is in even worse economical state with unemployment rising with people losing tens of thousands of jobs every year so I can understand how it's affecting them.

This shows again how few business decisions can affect mass of people and how fast things can change, since Nokia dominated ~40 of phone industry in 2008, just to fall so much in few years later. 

 

Sources: 1, 2, 3

[spartaman64]

at first i was about to jump to microsoft's defense but after seeing how nokia is a finnish company and probably the finnish government had to approve the deal which was influenced by microsoft's promises i think microsoft does have a responsibility compensating for the lost jobs

[Bouzoo]

3 minutes ago, spartaman64 said:

at first i was about to jump to microsoft's defense but after seeing how nokia is a finnish company and probably the finnish government had to approve the deal which was influenced by microsoft's promises i think microsoft does have a responsibility compensating for the lost jobs

They "only" bought the Nokia Devices and Services division. But if they were influenced by their promises then only black on white works, nothing else. 

[Misanthrope]

How much of these promises are actually in writing somewhere? Because Microsoft has been in deep shit with the European Union before and it can prove costly.

[GoodBytes]

Doesn't surprise me, Steve Ballmer traditional action here. The mess he left Microsoft in... wow...

But I think it was just words, but Finland is going after Microsoft because they are not doing well economically (mind you Nokia acquisition and layoff well hurt the country as it is THOUSANDS of jobs at once)

 

[Bouzoo]

1 minute ago, Misanthrope said:

How much of these promises are actually in writing somewhere? Because Microsoft has been in deep shit with the European Union before and it can prove costly.

Honestly, from the articles it looks like it was only words. Maybe something was written but nothing is mentioned. If it was written I think they would say that MS Broke the agreement or something similar and that a lawsuit/official complaint or something was on the way. 

[Misanthrope]

11 minutes ago, Bouzoo said:

Honestly, from the articles it looks like it was only words. Maybe something was written but nothing is mentioned. If it was written I think they would say that MS Broke the agreement or something similar and that a lawsuit/official complaint or something was on the way. 

Still messing with a government it's just not smart i.e. KIA made some extremely favorable agreement with our state government to open up a plant in my city. New administration comes in and goes "You're basically not paying taxes at all for a while and all the "jobs" you're creating are BS jobs since you're just immigrating all important management and engineering positions" so they basically said "Fuck your deal" and when they said "We have an agreement" just went "What agreement? Oh that was totally illegal, previous administration did not have the attribution to negotiate such deals" and well now we're "negotiating" but possibly have an international incident between Mexico and Korea due to it.

[dimitriianghelov]

Nokia hasn't been relevant since 2004 , not surprising at all that they get gutted

[dalekphalm]

I sincerely feel for the Finnish people, especially those who lost their jobs.

 

But let's be clear - if Microsoft didn't come along, then Nokia would. not. exist. They were on the verge of bankruptcy, and were much worse off then even AMD. At best, all of Nokia's assets and IP would be sold piecemeal to the highest bidder for a bankruptcy auction.

 

For better or worse, Microsoft saved the company by buying the Mobile division.

 

I would be curious to see if these agreements were verbal or made in writing. If they were strict contractual terms of a written agreement, then Microsoft should indeed be on the hook for at least some form of monetary assistance, and should work with local government to help these people find new work.

 

If they were just backroom "wishes and words", then this just goes to show - if you agree to something, get it in writing - otherwise it might as well never have happened.

[vanished]

This whole this is unfortunate, but it's probably not the first or last time something like this has happened...

Quote

Now tell me who won here tonight
The price, of winning worthless fight
We'll make the same mistakes again
Unless, this is truly the end

[Nowak]

23 minutes ago, dalekphalm said:

But let's be clear - if Microsoft didn't come along, then Nokia would. not. exist. They were on the verge of bankruptcy, and were much worse off then even AMD. At best, all of Nokia's assets and IP would be sold piecemeal to the highest bidder for a bankruptcy auction.

Nokia's phone business wasn't the profitable venture at the time Microsoft bought their phone business. Their networking and other IT ventures were, however, profitable. At the time the Microsoft deal closed, it seemed to make sense to offload the unprofitable business to keep the company from bleeding more money than necessary, but now it's looking like that too was a mistake.

[Bouzoo]

25 minutes ago, dalekphalm said:

I sincerely feel for the Finnish people, especially those who lost their jobs.

 

But let's be clear - if Microsoft didn't come along, then Nokia would. not. exist. They were on the verge of bankruptcy, and were much worse off then even AMD. At best, all of Nokia's assets and IP would be sold piecemeal to the highest bidder for a bankruptcy auction.

 

For better or worse, Microsoft saved the company by buying the Mobile division.

 

I would be curious to see if these agreements were verbal or made in writing. If they were strict contractual terms of a written agreement, then Microsoft should indeed be on the hook for at least some form of monetary assistance, and should work with local government to help these people find new work.

 

If they were just backroom "wishes and words", then this just goes to show - if you agree to something, get it in writing - otherwise it might as well never have happened.

True, Nokia was doing very bad and was losing money at a record rate and if they were to continue like that they would likely cease to exist in few years. No arguing there.

But here's the catch, apparently they were ready to stop producing Windows phones all together which would put MS in a weird position with 0 manufacturers pushing their platform so they had to buy it. If that was true, then they might've focused on other platforms like Android on which they seem to be finally focusing on. Would they have enough time to produce a proper phone on a different platform? Debatable. 

Considering MS is shutting them down one could argue that the purchase was a death wish and that if they didn't go with it, maybe, just maybe they would be able to survive. Thus again we have a what if situation. One I'd like to see. 

[Bouzoo]

1 minute ago, Daring said:

Nokia's phone business wasn't the profitable venture at the time Microsoft bought their phone business. Their networking and other IT ventures were, however, profitable.

And they were still losing ridiculos amounts of money, as in billions. 

[Anult]

2 hours ago, Bouzoo said:

And they were still losing ridiculos amounts of money, as in billions. 

And now Nokia are raking in tons of cash thanks to the efforts of Risto Siilasmaa and other remaining Nokia employees.

 

Really Microsoft ended up the big loser out of all of this, especially when you consider the fact that Nokia is going back into making smartphones through HMDglobal (who are run and staffed by former Nokia Services/Devices employees) and Foxconn's Mobile Division

[Bouzoo]

24 minutes ago, Pintend said:

And now Nokia are raking in tons of cash thanks to the efforts of Risto Siilasmaa and other remaining Nokia employees.

 

Really Microsoft ended up the big loser out of all of this, especially when you consider the fact that Nokia is going back into making smartphones through HMDglobal (who are run and staffed by former of Nokia Services/Devices employees) and Foxconn's Mobile Division

It goes without saying that he did a terrific job. Kudos to him. 

 

First they need to prove that people should buy their smartphones, many users forgot they exist, and have no experiences with their devices. Look at Sony, they make great smartphones but are struggling with sales. People just don't buy them.

[dalekphalm]

10 hours ago, Bouzoo said:

It goes without saying that he did a terrific job. Kudos to him. 

 

First they need to prove that people should buy their smartphones, many users forgot they exist, and have no experiences with their devices. Look at Sony, they make great smartphones but are struggling with sales. People just don't buy them.

Yeah that's a good point. Nokia making Android phones is no sure bet. There are already dozens and dozens of Android manufaturers. And even among the "Good name brand" phones, there are at least a dozen. This is why they didn't immediately start making Android Phones when they were in financial trouble and dropped Symbian - they needed the rather large cash infusion that Microsoft offered to recover their business.

[dalekphalm]

11 hours ago, Pintend said:

And now Nokia are raking in tons of cash thanks to the efforts of Risto Siilasmaa and other remaining Nokia employees.

 

Really Microsoft ended up the big loser out of all of this, especially when you consider the fact that Nokia is going back into making smartphones through HMDglobal (who are run and staffed by former Nokia Services/Devices employees) and Foxconn's Mobile Division

Do you have a source for their current financial situation? Not that I doubt you, necessarily, but it's always good to post sources and of course, I'm interested in reading about it (And others probably are too).

[Bouzoo]

7 minutes ago, dalekphalm said:

Do you have a source for their current financial situation? Not that I doubt you, necessarily, but it's always good to post sources and of course, I'm interested in reading about it (And others probably are too).

For starters, you can check their stock in last 10 years and notice the change when they were record low in 2012 until now. Great recovery. Not a record but great never the less. 

 http://www.nasdaq.com/symbol/nok/stock-chart

[dalekphalm]

1 minute ago, Bouzoo said:

For starters, you can check their stock in last 10 years and notice the change when they were record low in 2012 until now. Great recovery. Not a record but great never the less. 

 http://www.nasdaq.com/symbol/nok/stock-chart

I see the drop in 2012, but it looks like it peaked in late 2014, and has been trending downward since then. That doesn't look like strong recovery to me. It looks like they made a somewhat recovery, then plateaued.

 

Also, of course, stock prices are set by a very large number of factors. Can you link any articles about their revenue vs profit, etc? That would be more representative of the "tons of cash" you say they are raking in.

[PlayStation 2]

Am I really surprised that Microsoft holds promises about as well as Valve?

[Bouzoo]

19 minutes ago, dalekphalm said:

Also, of course, stock prices are set by a very large number of factors. Can you link any articles about their revenue vs profit, etc? That would be more representative of the "tons of cash" you say they are raking in.

Of it wasn't me who said that.  But sure, I'll find an article or two about it but probably tomorrow, I'm going to bed already, extremely exhausting week at work. 

[dalekphalm]

3 minutes ago, Bouzoo said:

Of it wasn't me who said that.  But sure, I'll find an article or two about it but probably tomorrow, I'm going to bed already, extremely exhausting week at work. 

My bad, you were the one who responded to my response and quote of @Pintend - I must have gotten you confused

[sof006]

Microsoft has always been good at keeping promises.... said no one ever.

 

Feel sorry for Nokia, I am glad they are planning on making a come back to make Android phones and hopefully smash Windows phone into the ground.

[Anult]

6 hours ago, dalekphalm said:

My bad, you were the one who responded to my response and quote of @Pintend - I must have gotten you confused

Nokia have their official financial results and reports available for everyone to see here:

http://company.nokia.com/en/investors/financial-reports/results-reports

 

Nokia are earning 8 billion a year now (as of Q1 2016). That's a ton of cash considering their financial position just a few years back.

 

They could also potentially make even more cash with their recent acquisition of alcatel-lucent.

[NumLock21]

Microsoft does not equal to promises

E.g.

Vista ultimate extras