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Microsoft To Move 2 Nokia Factories From China To Vietnam For Lower Labor Costs

It looks like Vietnam’s master plan to lure global tech companies is panning out with the announcement last week that Microsoft is closing two of its handset plants in China and moving operations to Vietnam.

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The move is part of a larger restructuring process that began in earnest last year when it was reported that Microsoft would lay off 18,000 of the 25,000 employees it inherited from Nokia when it purchased the handset company for US$7.2 billion in April 2014. In this latest round of downsizing, 9,000 workers in Bejing and Dongguan will lose their jobs, reports have pointed to cheaper labor costs.

Industry experts such as Larry Dignan, editor in chief of ZDNethave pointed to cheaper labor costs as the main reason for setting up shop in Vietnam. “A factory worker in Hanoi makes $145 a month compared to $466 in Beijing," said Dignan, citing the Japan External Trade Organization.

The shift to Vietnam will occur by then end of this month.

With major production bases for Samsung, Intel, LG and now Nokia, it looks like Vietnam is well on its way to attaining its goal of having 30 percent of its industrial product deriving from high-tech in the near future.

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