Nokia to cut up to 10,000 jobs amid cost savings drive and 5G focus

The restructuring is expected to lower the company’s cost base by approximately €600 million by the end of 2023.

Telecommunications equipment provider Nokia has revealed plans to cut up to 10,000 jobs from its global ranks as it works to reduce costs and pump more resources into 5G, cloud and digital infrastructure technologies. 

“Nokia’s business groups today announce plans to reset their cost bases and invest in R&D [research and development] and future capabilities including 5G, cloud and digital infrastructure, as well as other areas that will benefit Nokia in the long-term,” the company said in a statement.  

The planned restructuring is expected to result in an 80,000–85,000-employee organisation, over an 18–24-month period, instead of the approximately 90,000 employees Nokia has at present, the company said.  

At a group level, the restructuring is expected to lower the company’s cost base by approximately €600 million by the end of 2023, with the savings anticipated to offset increased investments in R&D, future capabilities and costs related to salary inflation.

The exact number of job cuts will depend on market developments over the next two years, the company said.

“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 president and CEO.

In October last year, Nokia announced a new operating model designed to better position the company for “changing markets and align with customer needs”.  

According to the company, the new model is optimised for better accountability and transparency, increased simplicity and improved cost-efficiency.

“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,” he added