When Microsoft took over the devices and services division of Nokia, the Indian production plant in Chennai was left out of the deal due to legal issues. The Indian government claimed that Nokia had been skirting the tax laws and owed the government close to $400 Million in tax money.
Unfortunately, the continuing asset freeze imposed by the tax department prevents Nokia from exploring potential opportunities for the transfer of the factory to a successor to support the long term viability of the established, fully functional electronics manufacturing ecosystem,”
Even after which the Indian government would not back off, and forced the plant to be left out of the original acquisition deal, now it seems the fate has been sealed as Nokia announced that their plans to completely shutdown the factory operations, effective November 1st.
“Microsoft has informed Nokia that it will be terminating the manufacturing services defined in the agreement with effect from 1 November 2014. In absence of further orders from Microsoft, Nokia will suspend handset production at the Sriperumbudur facility from 1st November,” Nokia said in a statement.
It’s not clear exactly how many workers are at the factory currently, but the latest numbers indicate at least 6,600 employees; needless to say this will create further economic problems and job issues in India.