Nokia has announced the elimination of 5,000 to 10,000 jobs worldwide in two years

AFP

Nokia has announced the elimination of 5,000 to 10,000 jobs worldwide, out of a total of more than 80,000 employees in the group. This represents 11% of the group's workforce. France will not be affected by these job cuts.

Nokia plans to cut 5,000 to 10,000 jobs within two years, or up to 11% of its workforce, as part of a major cost-cutting plan, announced Tuesday the Finnish telecom equipment manufacturer. The restructuring is expected to result in a group of "80,000 to 85,000 employees within 18 to 24 months, compared to about 90,000 at Nokia today. The exact number will depend on market developments over the next two years," the company wrote in a statement.

After the takeover of French-Canadian rival Alcatel-Lucent in 2016, the workforce of the group, which exited its historic cell phone manufacturing business in 2013, had risen back above 100,000. Headcount reductions and major cost cuts are already underway, particularly in France, where Nokia is painfully cutting a thousand jobs inherited from Alcatel-Lucent.

600 million euros in cost reductions

Number 3 in the world of fifth-generation 5G networks, the group headed since August by Pekka Lundmark is struggling to keep up with its main competitors, Sweden's Ericsson and especially China's Huawei. "Decisions that have a potential impact on our employees are never taken lightly. Ensuring we have the right configuration and capabilities is a necessary step to deliver long-term sustainable performance," the CEO, who has made 5G Nokia's top priority, pleaded in the statement. The plan announced Tuesday should lead to a decrease in Nokia's costs "of about 600 million euros by the end of 2023", intended to finance investments in research and development and "future capabilities" explains the Finnish group.

It follows the already announced reorganization of the group into four business lines. Nokia, which suffered a heavy loss in 2020 linked to an exceptional charge in Finland, had warned last month that it expected "headwinds" in 2021, especially in 5G in North America. Restructuring costs should be around 600 to 700 million euros, again by 2023, says Nokia. The group is expected to detail its strategy on Thursday at an investor presentation day.

Source: AFP