Finnish telecoms equipment maker Nokia said Tuesday it will slash up to 11 per cent of its workforce within two years as it launches a “huge” cost-cutting drive and focuses 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, Nokia 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.”
Much of the savings are to be re-invested into research and development (R&D), the firm said, especially in Nokia’s mobile networks and cloud operations, after new chief executive Pekka Lundmark pledged last year to “invest whatever it takes to win at 5G.”
Analyst Kimmo Stenvall of OP Financial Group told AFP: “The firepower of R&D is huge at the moment in Nokia so this will bear fruit in the future, but investors will have to wait a couple of years to see how it turns out.”
The company said it was “too early to comment in detail” on where the job cuts will take place.
Nokia however told AFP that France would be spared job losses, given that 1,000 posts were already being cut following Nokia’s 2016 takeover of Alcatel-Lucent.
Finland, where the group is headquartered and where it last year recruited over 1,200 new staff for 5G posts, is also expected to emerge largely unscathed, with Nokia saying that it expects the restructuring to have a “net positive” impact in the Nordic country.