Nokia is still caught up in a tax dispute in India, but the company has begun offering a voluntary retirement package to workers at a factory which was seized by a local tax office last year. The plant at Chennai has around 6,600 full-time employees, all of which are eligible for the retirement package. Nokia had originally planned to transfer the plant to Microsoft as part of the deal going ahead, but the situation has been complicated by Indian officials challenging Nokia.
In an article in the the HinduBusinessLine Nokia has announced a Voluntary Retirement Scheme for its workers which, according to Nokia, will allow them to leave and find alternate employment on a firm financial footing.
Nokia India recently indicated that manpower reduction would be likely at the plant due to uncertainty over continuing operations. The Income Tax Department had frozen the company’s assets last year over a tax dispute. The issue needs to be resolved soon to enable Nokia to transfer the same assets to Microsoft as part of a $7.4-billion global deal. Nokia said it regularly reviews its manufacturing strategy to optimise and ensure the smooth and timely delivery of its products. This process considers many factors, including the predictability and stability of the regulatory environment in host countries. “Following such a review, we launched a VRS. Nokia is offering a clear financial option for interested factory employees. We feel this package offers staff the chance to seek new opportunities outside the company based on a firm financial footing,” the company said.
The Trade Union at the facility are apposing the news, but of course if Indian tax authorities make the location non-viable there is not much anyone can do.