Nokia to cut up to 10,000 jobs by 2023
Finnish telecoms equipment maker Nokia announced Tuesday it will slash up to 11 percent of its workforce within two years as the firm looks to cut costs and focus on a few key areas in the face of tough competition over super-fast 5G networks.
Announcing a 600-million-euro ($715-million) cost-cutting programme, it said it expects to become “an 80,000–85,000 employee organisation, over an 18–24-month period, instead of the approximately 90,000 employees Nokia has today.”
The company said it is “too early to comment in detail” on where the job cuts will take place, but told AFP that “France is excluded due to previously announced planned restructuring.”
The loss of over 1,000 jobs in France is still underway following Nokia’s 2016 takeover of Alcatel-Lucent.
Finland, where the group is headquartered and where it last year recruited over 1,200 new 5G posts, is also expected to be largely spared, with Nokia saying that it expects the restructuring to have a “net positive” impact in the Nordic country.
Market developments in the next two years will determine the exact number of job losses, the company said, adding that the firm will also streamline its portfolio and reduce “site fragmentation” in the long-term.
Nokia has flagged in the three-way race against Ericsson and Huawei to dominate the 5G equipment market, losing out on a major Verizon contract in the US last year and failing to make inroads in China.
The firm has in the past had difficulties competing on price against its rivals and has struggled to convert its existing 4G bases into 5G contracts.
After chief executive Pekka Lundmark took the helm in August last year, he scrapped previous CEO Rajeev Suri’s “end-to-end solutions” strategy, replacing it with a more focused approach and pledging to “invest whatever it takes to win in 5G”.
The company will in future be structured around four business groups aligned with customer buying behaviour — Mobile Networks, IP and Fixed Networks, Cloud and Network Services and Nokia Technologies — each with its own profit and loss sheet.
“In those areas where we choose to compete, we will play to win,” Lundmark said in Tuesday’s statement.
The firm announced in February that predicted market share loss in North America in 5G and 4G along with price erosion meant the firm’s 2021 outlook remained unchanged, with a 7-10 percent operating margin target.
Nokia’s share price fell slightly after the announcement but had rallied to its previous close of 3.62 euros by 11:30am (0930 GMT) on the Helsinki stock exchange.
The Finnish group is due to announce further details of its strategy and long-term financial forecasts on Thursday.