Nokia has announced that it will lay off 10,000 employees over the next two years as part of its restructuring plan. The company has also announced cost cutting, as well as investing in R&D, investing in future capabilities including 5G, cloud and digital infrastructure.
The company has invested heavily in strengthening its role as the main supplier of 5G technology and for research and development (R&D) operations. This is expected to reduce the company’s cost base by around 60 million euros by the end of 2023 at the group level. These savings will compensate for the increased investment in costs related to recharge and development, future capabilities and salary inflation.
Nokia currently has 90,000 employees
“As a result of the planned restructuring, 80,000-85,000 employees are expected to result in an organization over a period of 18-24 months and Nokia currently has around 90,000 employees,” the company said in a statement late Tuesday. In October last year, the company announced a new operating model, designed to better position the market to change and align with customer needs.
Cost base reset
President and CEO of Pekka Lundmark said, ‘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 base. ‘ The company said that additional long-term benefits would include Nokia streamlining its portfolio and reducing fragmentation of the site.
5G will remain the company’s focus
Nokia said that it expects a cash inflow of about 500 million euros related to its previous restructuring program. The company said that the objective of the mobile network division is to be unquestionably at the helm in wireless mobility networks and related services. To achieve this goal, Nokia will focus on strengthening technology leadership and further invest in 5G, R&D. The company will also accelerate efforts to digitalize processes and tools in the value chain.