Stephen Elop At Nokia Press Conference
Nokia CEO Stephen Elop has announced 4,000 people will be without a job by the end of next year; and 3,000 more will be transferred to Accenture and will help the company transition to Windows Phone 7. Reuters

Nokia's workers will be demanding a sizeable severance package if layoffs come, according to the chairman of the local labor union.

The white-collar union Ammattiliitto Pro, or Pro Unions, represents many of the workers at Nokia. The Chairman, Antti Rinne, said that he thinks the layoffs - announced at a press conference Friday - could mean some three thousand jobs lost in Finland. He says a starting point will be assistance in finding other work and severance payments of tens of thousands of euros.

Rinne added that the unions have not received any concrete proposals from Nokia, and that they would wait until they do to give more details.

Nokia employs about 19,800 people in Finland. The company has laid off workers in Finland before - most recently in December, when the company announced that it was cutting 800 jobs. As part of an agreement with worker representatives it offered severance packages amounting to 5-15 months of salary.

Nokia announced on Feb. 11 that it was entering an alliance with Microsoft and would use Windows Phone 7 as its primary smartphone platform. But that meant stopping the work on the Symbian and MeeGo operating systems. Symbian has hitherto powered the company's phones, and MeeGo was slated to be the software that ran Nokia's next generation of smartphones and possibly tablets.

At the same time, Nokia CEO Stephen Elop said the company would be cutting costs, and that means workers, especially in its higher-wage locations such as Europe and the U.S. He said the company had to trim expenses to compete with other major mobile phone companies including Apple, Motorola and up-and-comers such as HTC and Samsung. Nokia spends more on research and development than other mobile phone makers - about $3.9 billion in 2010 - but had little to show for it over the last three years.

A leaked memo from Elop showed him expressing frustration that Nokia had failed to produce a device that generated the buzz equivalent to the iPhone.

On Friday, thousands of Nokia employees walked off the job to protest the planned layoffs.

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