Hungarian town suffers as Nokia announces big layoffs

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Komarom is separated from Komarno in Slovakia only by the Danube river, and many Slovaks commute every day to work in the Nokia plant.

Nokia said Wednesday it would let go 4,000 more people around the world, more than half of them in Hungary, ending all phone assembly operations in Europe.

In Hungary, 2,300 jobs will be axed in two or three steps by the end of the year, Nokia told its workers, adding that most of the losses would be blue-collar, manufacturing positions.

The move hurts the labor market in Hungary as well as Slovakia, where about a third of Nokia's workers have commuted from, even as Hungary's political elite repeatedly declared the phone giant one of its most prized investors.

"I still stand by this: we should support foreign investors who, for decent profit, create jobs for Hungarians and using Hungarian labor they create value," Prime Minister Viktor Orban told an audience of his supporters Tuesday, praising Nokia along with companies like German car makers Audi and Daimler.

"These firms must be welcomed and kept around," Orban said.

It remains to be seen just how big a dent Nokia's move will put in Hungary's economic output. The firm's Hungarian revenues have topped 1 trillion forints ($4.56 billion) per year despite any recent market trouble, the news web site index.hu said.

The phone maker's output has boosted Hungary's overall industrial performance so much that its struggles were felt on a macroeconomic level, analysts said.

"The silver lining is that Nokia is not moving the highest added-value activities, only the assembly function, which represents the lowest added-value in the factory," Takarekbank analyst Gergely Suppan told Reuters.