Although Nokia has completed the deal of selling its handset business unit to Microsoft at the end of April, the acquisition deal did not cover Nokia"s plant in Chennai as Nokia has failed to settle the tax dispute with the India government.
While the Nokia Chennai plant, previously one of the largest handset production bases for the vendor, currently is still operating as an OEM factory for Microsoft, about 5,000 employees of the plant have chosen to retire voluntarily, the sources noted.
The slimdown of the plant has affected the ecosystem in the area, and the sources indicated that FIH Mobile, previously a major supply of handset parts and components to Nokia"s Chennai plant, will also further reduce the number of its workers in Chennai.
In response, FIH Mobile said that it has reduced the number of employees at its Chennai plant to 1,700 currently from 6,000 three years ago, and that it has continued to adjust its business and production strategies in line with changes at clients.
FIH Mobile is still optimistic about the business prospects in India and will continue to strengthen its deployments in the market on a long-term basis.
FIH Mobile managed to generate a net profit of US$77.71 million in 2013, buoyed by improvements in product mix, business models, and operating efficiency.
FIH Mobile has recently spent US$2.24 million taking up a 7.8% stake in mobile platform operator Project Goth, a move which aims to further expand its business scope, the sources commented.