HELSINKI (AFP) – Finnish telecoms equipment maker Nokia announced yesterday it will slash up to 11 per cent of its workforce within two years, as part of a EUR600-million (USD715-million) cost-cutting programme.
Announcing the wide-ranging restructuring led by new chief executive Pekka Lundmark, Nokia said that market developments in the next two years will determine the exact number of job losses.
“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 today,” the company said in a statement.
The firm will also streamline its portfolio and reduce “site fragmentation” in the long-term, the statement said.
Nokia has struggled in the three-way race against Ericsson and Huawei to dominate the super-fast 5G equipment market, losing out on a major Verizon contract in the US last year and failing to make inroads in China.
After Lundmark took the helm in August last year, he scrapped previous CEO Rajeev Suri’s “end-to-end solutions” strategy, replacing it with a more focused approach and pledging to “invest whatever it takes to win in 5G”.
The firm announced in February that predicted market share loss in North America in 5G and 4G along with price erosion meant the firm’s 2021 outlook remained unchanged, with a seven to 10 per cent operating margin target.