Finnish telecommunications company Nokia has announced plans to cut 10,000 jobs worldwide in the next two years, and wants to use the savings to catch up with competitors of 5G technologies.
The company said it would reduce its global workforce to between 80,000 and 85,000 over the next 18 to 24 months, from now 90,000. The exact number will depend on market developments. Nokia will invest the estimated cost savings of € 600 million (£ 515 million) annually in research and development, in particular in 5G, cloud and digital infrastructure.
Pekka Lundmark, the new CEO of Nokia, who took over in August, has promised to catch up with the new generation of mobile networks 5G after Nokia fell behind with its main competitors, the Huawei, China and Ericsson from Sweden. It missed the early rounds of 5G networks after focusing on the integration of Alcatel-Lucent, the French smartphone and wireless equipment company acquired in 2015.
Lundmark said: ‘In the areas where we choose to compete, we will play to win. Therefore, we improve the quality of the product and the competitiveness of the cost, and we invest in the right skills and abilities. ”
Nokia’s planned job losses include 96 in the UK. France will be spared this time after cutting 1,233 jobs last year, reducing the workforce of its French subsidiary Alcatel-Lucent by a third.
A Nokia spokesperson said: ‘These plans are global and are likely to affect most countries. It is too early to comment in detail, as we have only just informed local works councils and expect the consultation processes to start soon, where applicable. “
It is expected that there will be around 300 jobs in Finland, mainly in Nokia headquarters. The spokesman said the company would continue to recruit in the 5G area in the country, and that the changes would be net positive.
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Last year, Nokia employed nearly 40,000 people in Europe, 20,500 in the Asia-Pacific region, 13,700 in Greater China, 12,000 in North America and 3,700 in Latin America.
The global measures will result in one-off costs of € 600 million to € 700 million, half of which will be discussed this year. Nevertheless, Nokia is sticking to its financial leadership for 2021.
Nokia is now focusing on telecommunications network equipment. The company, which was once the world’s largest manufacturer of mobile devices, lagged behind because it underestimated the popularity of touchscreen smartphones and sold its mobile business to Microsoft in 2013, which it later wrote off.
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