Commentary: What happens when tech giant Nokia transforms a village with a promising factory – then bolts

Commentary: What happens when tech giant Nokia transforms a village with a promising factory – then bolts

Nokia transformed a small village in India promising jobs, yet at a cost to female workers that lingers, says Vani Swarupa Murali.

Flags with the Nokia logo flutter at company's headquarters in Espoo
Flags with the Nokia logo flutter at company's headquarters in Espoo, Finland, May 5, 2017. (Photo: REUTERS/Ints Kalnins)

SINGAPORE: Just 40km southeast of Chennai in the south of India lies Sriperumbudur, a part of the Kanchipuram district of Tamil Nadu. While Kanchipuram is a town, famous for its silk saris and Hindu temples, the village of Sriperumbudur has mostly been famous for the assassination of the country’s late Prime Minister Rajiv Gandhi.

The site was recently visited by Sonia, Rahul and Priyanka Gandhi in the last days of recent election to mark the 28th anniversary of his assassination.

Sriperumbudur has flourished in the years since and now boasts a comparatively higher literacy rate than the state average, and the village has some over 6,300 houses, all supplied with basic amenities of water and sewage.


Back in 2005, Sriperumbudur was buzzing as a technology giant came to town.

Mobile phone company Nokia began construction of a major factory, a symbol of industrialisation that lit up a spirit of excitement in the village about the transformation and change that seemed possible.

It was especially exciting for local women, who saw an opportunity for higher paid work and an escape from farm labour or other typical jobs in the district.

But the experience also became a salutary lesson on the fluctuations of the global economy and the vulnerability of women when exposed to big businesses in search of profit.

The attraction of Sriperumbudur to a big international company was location of the village, sitting inside the Tamil Nadu Special Economic Zones’ Act (SEZ), a point that allowed flexible labour provisions.

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Nokia was able to hire without any restrictions on working hours for women and allowed women to work night shifts. According to a field study by researcher Madhumita Dutta published in 2016, Nokia and its supplier companies preferred to hire women because it assumed women were docile, patient and more nimble in the workplace.

Telecommunication network company Nokia - Q2 2018 results
Headquarters of Finnish telecommunication network company Nokia are seen in Espoo, Finland July 26, 2018. (file photo: Lehtikuva/Mikko Stig via Reuters)

In the months ahead, of the 8,000 workers hired by Nokia and its seven supplier companies, 70 per cent were young local women.


At the time, not many people lived in Sriperumbudur. Workers were recruited from as far 50km away, travelling to and from the factory. Nokia set out on an impressive, large-scale recruitment drive to hire girls who had just completed their senior high school exams.

There were advertisements, college theatres booked for interviews and campaigns to create a flurry of action and excitement.

The selection criteria were clear enough, with the would-be workers put through tests for hand steadiness, hand-eye coordination, finger dexterity, and more.

The women would have to fit minute screws into the more than 1,000 components within the mobile phone on a constantly moving assembly line.

The salary was alluring. In what for many would be their first jobs, they could earn a starting wage of US$36 to US$72 a month, a significant income in comparison to what they would earn in agriculture.

This gave women a potential for independence, emancipation and empowerment. Within a year, having someone in the family work in Nokia became something of a status symbol.

India is ranked as the world's sixth-biggest economy just behind Britain and ahead of France
India is ranked as the world's sixth-biggest economy just behind Britain and ahead of France. (Photo: AFP/Punit PARANJPE)


According to Dutta’s research, there was apparently a preference to hire girls who did not excel in school or were from government schools because they were assumed to have limited opportunities to switch jobs.

They also preferred women from backward castes, scheduled castes or scheduled tribes because they were seen to be more willing, than the upper or middle-caste women, to work night shifts.

The high demand for women was matched with important safeguards for them as well. Corporate buses were arranged to ferry women to and from their homes every day. Resting areas for pregnant women and nurseries for children were also allocated.

However, this rosy picture started to fade in 2009 when employees launched strikes demanding pay rises commensurate with the duration of employment in Nokia.

They were already beginning to get frustrated by the monotony of repetitive tasks and constant standing in the factory. The friendships that they forged helped them to cope, until management “reshuffled” the lines every six months.

FILE PHOTO: Flags with the Nokia logo flutter at the company's headquarters in Espoo
Flags with the Nokia logo flutter at company's headquarters in Espoo, Finland, May 5, 2017. (Photo: REUTERS/Ints Kalnins /File Photo)

This was done supposedly to create a productive, “hyper-efficient” social setting, but it meant the women would constantly need to re-build new friendships.


In 2010, Nokia settled the wage strikes by increasing the pay, but in 2013, the Indian tax authorities froze Nokia’s assets and sued for millions over allegations of tax evasion.

It was a downward spiral from then – in the latter half of that year, Nokia sold its operations to Microsoft, and in October 2014, Nokia Sriperumbudur was instructed to suspend all work, and the next month Microsoft terminated the mobile purchase agreement and the factory shut down the following day.

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For the women workers, this left an uncertain future. The pursuit of work in a globalised economy had brought them what became a temporary opportunity, only for many the allure of such a job also interrupted their schooling and perhaps denied them the chance to do more.

An ethnographic study done by Ashish Mishra and S Bridget Leena followed the lives of many of Nokia Sriperumbudur’s former employees after the closure. They sought to understand the fate of these former employees and the effectiveness of Nokia’s compensation policies.

As compensation for the closure, a voluntary retirement scheme (VRS) was offered. Out of 6,600 employees who remained in May 2013, about 5,600 took up the VRS scheme and they were paid about US$4,300 to US$7,000.

More people took up the schemes in the months following, leaving Nokia to pay US$35.9 million in total. By October that year, 850 employees remained, hoping the factory would fill more orders or the compensation on offer would be increased.

Over the course of their study, Mishra and Leena asked the women why they did not take up the scheme and revealed a trend: Many of them saw the amount as insufficient vis-à-vis the amount of responsibility they had taken up at home. As one put it:

It is not sufficient for a person like me who has slogged for the company for eight years. I have two sisters who are pursuing nursing and education. My dad is a driver and cannot afford to educate them.

Of those women who did accept the VRS scheme, many were unemployed for a long time. Women expected similar working conditions as Nokia in all other factories.

Voters line up to cast their votes outside a polling station during the second phase of general ele
Voters line up to cast their votes outside a polling station during the second phase of general election in Amroha, in the northern Indian state of Uttar Pradesh, India, April 18, 2019. (Photo: REUTERS/Anushree Fadnavis)

This was unrealistic and hindered many women in prospective employment. Managers of other factories also argued that they had too many men on the shop floor to allow employment of women.

But the challenge went further. The skills that women obtained at the Nokia factory were often not transferable to other assembly plants, such as those for automobiles or auto components.

Many women who could not afford higher education had chosen to join Nokia after seeing the allure of a stable position on the shop floor quickly.

This meant that most women were just school graduates, whereas the men in other factories were polytechnic or industrial training institute graduates. As another woman told Mishra and Leena:

I am 27 now, I did not pursue my correspondence education … I don’t have other skills that can be used in other industries.


Seeing skill disparity as a key problem preventing re-employment, Nokia offered a “bridge initiative” for former employees of over five years.

Some 30 training courses were offered across Tamil Nadu, covering areas such as Microsoft Office and garment making. It saw a 60 per cent uptake.

Eventually, the Tamil Nadu government resolved the tax dispute and in 2016 confirmed talks with Taiwanese electronics company Foxconn for the revival of the Nokia plant.

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Since then, Foxconn has been manufacturing phones for different companies, employing 15,000 people and 90 per cent women.

In December 2018, it was announced that the Foxconn unit in Sriperumbudur will begin manufacturing iPhone models, giving women a greater chance of being re-employed.

Opportunity for the women workers of Sriperumbudur seems to be turning for the better, at least for now.

What this experience shows are the fluctuations that women go through in the tumult of the global market, which is so often reported in terms of headline figures, trends and stock prices, and rarely in terms of the human vulnerability and consequences of economic decisions.

Security was tight as voting got underway in India's northeastern state of Assam
Security was tight as voting got underway in India's northeastern state of Assam (Photo: AFP/Biju Boro)

The Nokia factory empowered women to take on more than domestic responsibilities but left them stranded after the shutdown of the factory. They were equipped with skills that were not transferable to other jobs and have struggled to be re-employed.

The power lies with the companies, the convenience that comes from global competition by governments seeking to attract investment, whether with flexible labour regulations or other incentiv.

In Sriperumbudur, the experience was sweet yet bitter, giving women hope for a brighter, more financially independent future but also dashing dreams in the process.

The challenge for the rights of women is to better understand the costs so the cycle is not repeated.

Vani Swarupa Murali is a research analyst at the Institute of South Asian Studies, National University of Singapore. She focusses on domestic politics in India and looks specifically into rural India. This commentary first appeared on Lowy Institute’s blog The Interpreter.

Source: CNA/sl