Nokia to cut 10,000 jobs in bid to boost R&D funds
The Finnish telecoms giant plans to save €600m over the next two years to reinvest into emerging technologies
Nokia has announced plans to axe 10,000 jobs over the next two years in a bid to raise €600 million (£517 million) to invest in future technologies.
The Finnish telecoms giant currently has 90,000 people on its books and the planed "restructuring" is expected to reduce that to between 80,000 and 85,000 over an 18-to-24 month period.
The plans to restructure come after Nokia last year announced a new operating model that will see the firm focus on emerging technologies, such as 5G, cloud and edge computing. The company said it plans to "reset its cost bases" in order to fund research and development in these areas that will benefit Nokia in the long-term.
"Decisions that may have a potential impact on our employees are never taken lightly," Nokia's CEO, Pekka Lundmark said. "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."
The cuts will not be made in a specific part of the business or in any one location, but they will come as a result of changes to each of Nokia's business groups - Mobile Networks, Cloud and Network Services, Network Infrastructure and Nokia Technologies.
Nokia's Mobile Networks is doubling down on 5G research and development as well as pushing more digitisation across its platform. This will involve reducing investment in "mature or declining parts" of the unit's portfolio. The Cloud and Network Services division will aline with the global shift to "as a service" delivery models. This means changes to its current portfolio of services and its technology leadership will also be "strengthened".
Nokia Technologies and its Network Infrastructure unit will remain "largely" unchanged, but both will increase research and development in future tech. All the changes are subject to local consultation with employees and their representation.
"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."
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