Helsinki: Finnish telecom equipment maker Nokia announced on Tuesday that it will cut up to 11% of its workforce within two years, as part of €600 million cost-cutting program.
Nokia announced a large-scale restructuring led by new CEO Becca Lundmark, and said market developments in the next two years will determine the exact number of job losses.
“The planned restructuring is expected to result in an employee organization of between 80,000 and 85,000 employees, over a period of 18 to 24 months, instead of the approximately 90,000 employees of Nokia today,” the company said in a statement.
The company will also work to streamline its portfolio and reduce “site fragmentation” in the long term, the statement said.
Nokia fought in the three-way race against Ericsson and Huawei to dominate the ultra-fast 5G equipment market, losing a major contract for Verizon in the US last year and failing to make headway in China.
After Landmark took office in August last year, he canceled the “comprehensive solutions” strategy of former CEO Rajeev Suri, replacing it with a more focused approach and pledging to “invest whatever it takes to win the fifth generation.”
The company announced in February that projected losses in its North American market share in 5G and 4G networks along with price erosion meant that the company’s 2021 outlook remained unchanged, with a target of 7-10% operating margins.
“In those areas in which we choose to compete, we will play to win,” Lundmark said in a statement on Tuesday.
Job cuts from Nokia’s previous round of cost cuts announced in 2018 are still underway, including the loss of more than 1,000 jobs in France after its acquisition of Alcatel-Lucent.
On Thursday, the Finnish group is set to announce more details of its strategy and long-term financial outlook.