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Nokia to cut 10,000 jobs by 2023

Nokia to cut 10,000 jobs by 2023
Nokia to cut 10,000 jobs by 2023
The headquarters of Finnish telecommunication network company Nokia in Espoo, Finland. (AFP)

Nokia has confirmed it will cut 11% of its workforce within two years.

The Finnish telecoms company said it is launching a ‘huge’ cost-cutting drive to focus on a few key areas in the face of tough competition over super-fast 5G networks.

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, 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.’

The company said it was ‘too early to comment in detail’ on where the job cuts will take place.

Finland, where the group is headquartered and where it last year recruited over 1,200 new staff for 5G posts, is expected to emerge largely unscathed.

Nokia says that it expects the restructuring to have a ‘net positive’ impact in the Nordic country.

The race for 5G

5G Fast speed Wireless internet connection communication mobile technology concept - image with copy space.
Nokia is up against Ericsson and Huawei to develop 5G (Getty)

Nokia has flagged in the three-way race against Ericsson and Huawei to dominate the 5G equipment market, notably failing to make inroads in China.

The firm has had difficulties competing on price and has struggled to convert some of its existing 4G bases into 5G wins, losing out on a major Verizon contract in the US last year which will impact the outlook into 2022.

After Lundmark took the helm in August 2020, he scrapped previous CEO Rajeev Suri’s strategy in favour of a more focused approach.

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.

Nokia’s share price remained largely flat following the announcement, adding just 0.1 percent in late trading on the Helsinki stock exchange.

The firm said its 2021 outlook remained unchanged, with a 7-10 percent operating margin target.