Nokia to cut up to 10,000 jobs to invest more in research capabilities

As Finnish telecom giant Nokia steps up to challenge Sweden’s Ericsson and China’s Huawei, it recently made an announcement of its plans to cut almost 10,000 jobs. With this, the company seeks to trim its investments in human resources and invest more in R&D to catch up on 5G.

Currently, Nokia houses over 90,000 employees around the world and since 2015, it has been cutting thousands of jobs. In 2020, the company slashed more than 1000 jobs in France. A union representative said that almost 300 jobs are most likely to go in Finland, the company’s home country this year. Nokia expects the current restructuring to bring down its cost base by about 600 to 700 million euros by the end of 2023.

Chief Executive Pekka Lundmark said that those who will be hit due to job loss will be supported. “Decisions that may have a potential impact on our employees are never taken lightly. My priority is to ensure that everyone (that will be hit) is supported through this process,” he added.

Lundmark stepped up as the CEO in 2020 and since then, he has brought about positive changes and corrected the product missteps taken by Nokia’s previous management that hurt the company’s 5G ambitions and dragged on its shares. He is expected to present his long-term strategy and discuss actions plans and set financial targets on March 18, 2021.

Once the biggest handset manufacturer in the world, Nokia has failed to catch up to its competitors such as iPhone and Samsung in terms of sale of touch screen phones. Having sold its handset business to Microsoft, the company has been focusing on telecom equipment. So far, Nokia has been managing to remain on par with its Swedish counterpart in terms of telecom business. However, unlike Ericsson, Nokia has not won any contract in China.