The announcement last week by Nokia that it is to cut 10,000 jobs worldwide has thrown Oulu into crisis.

Prime Minister Jyrki Katainen has even cancelled his scheduled trip to Brazil to come to Oulu this week to reassure Nokia workers whose jobs are threatened. He will also go to Salo, in the south of the country, which will be even harder hit by the job losses. Oulu has been declared a ‘structural change city’ by the government. Salo was already given this status in the wake of earlier swingeing cutbacks by the former mobile phone giant.

With Finland as the head of Nokia operations, the axe is likely to fall on Finnish workers in particular. It is estimated that 3700 Finland-based Nokia workers will be made redundant by the end of the year. Currently, there are 1200 people in Oulu working directly for Nokia. YLE have estimated that between 500 and 600 those will lose their jobs. In the worst case scenario, this will mean that just 600 people in Oulu work for Nokia, down from 2500 in 2009. The knock-on effect for Nokia subcontractors is difficult to calculate.

Mayor of Oulu Matti Pennanen has conceded that if the numbers fired – directly by Nokia and indirectly by subcontractors – run into the thousands then, ‘this is going to be very difficult to manage.’ He is also concerned that Nokia’s downsizing will lead to a brain-drain, with thousands of highly trained and educated people leaving not just Oulu but Finland itself.

The cuts in Salo will be even more dramatic with severe job losses at Nokia’s factory there. In addition, Salo already suffers from high unemployment compared to Oulu.

When Nokia’s CEO Stephen Elop announced the proposed redundancies last week Nokia’s shares fell by eighteen percent to their lowest level since 1996.

Nokia has simply been unable to compete against Apple’s Smartphone, stagnating while Apple’s innovation took on the world. Nokia is now hoping to survive on its Lumia range of phones, which are effectively its own version of the Smartphone.

In 2000, over 24,000 people in Finland worked for Nokia. By the end of the year, it will be only 12,000.