Nokia to make 10,000 job cuts by 2023
Nokia has announced that it is to “reset their cost bases and invest in R&D” with the loss of 10,000 jobs across its business groups.
In a statement, the company said that it is focusing on the development of future capabilities such as 5G, cloud and digital infrastructure, as well restructure its business accordingly.
Specifically, it will reduce its workforce of 90,000 to approximately 80,000–85,000 over the next 18-24 months, the exact number is subject to change contingent on market developments.
“Decisions that may have a potential impact on our employees are never taken lightly. Ensuring we have the right setup and capabilities is a necessary step to deliver sustainable long-term performance. My priority is to ensure that everyone impacted is supported through this process,” said Pekka Lundmark, Nokia’s president and CEO.
As part of this restructuring, Nokia expects to make €600 million in cost cuts by 2023. This will offset the company’s increased spend it R&D and new technologies. It will also streamline its portfolio by reducing investment in mature or declining parts of the portfolio.
“Nokia now has four fully accountable business groups. Each of them has identified a clear path to sustainable, profitable growth and they are resetting their cost bases to invest in their future,” said Lundmark.
“Each business group will aim for technology leadership. In those areas where we choose to compete, we will play to win. We are therefore enhancing product quality and cost competitiveness and investing in the right skills and capabilities.
Its Mobile Networks group says it will further invest in 5G R&D and improve efficiency by digitising its operational processes and tools.
Nokia’s Cloud and Network Services’ group recognises the proliferation of cloud-based as-a-service, services as the norm and will align its offerings accordingly.
While the Nokia Technologies and Network Infrastructure groups remain largely unchanged but will continue to manage costs and invest in further R&D.
The news follows Nokia’s news in October 2020, when it announced a new operating model to better position the company for changing markets and align with customer needs.
In related news, Nokia recently entered into an agreement with Microsoft, AWS and Google to develop new cloud-based 5G radio solutions using its radio RAN technology. The aim of the collaboration is to develop new business cases.