Nokia warned of up to 10,000 job cuts as part of a wider restructure effort designed to reset its cost base and increase R&D investment, with CEO Pekka Lundmark outlining the vendor’s goal to lead on technology and win against the competition.
In a statement, Nokia said the planned restructure would leave it with a workforce of 80,000 to 85,000 compared with around 90,000 today, with the move scheduled to be implemented over a period of 18 to 24 months.
The company expects to lower its cost base by approximately €600 million by the end of 2023, with the savings offsetting increased investment in R&D, future capabilities and costs related to salary inflation.
In total, Nokia expects between €600 million to €700 million of restructuring and associated charges by 2023, of which 50 per cent is expected to be realised in 2021, 15 per cent in 2022 and 35 per cent in 2023.
The targets do not alter Nokia’s 2021 outlook, it added.
Winning strategy
Tough talking boss Lundmark has pulled no punches in trying to change the company’s fortunes since taking over from former CEO Rajeev Suri in August 2020, with this latest effort following a sweeping restructure plan announced in October 2020.
Among the wider plan, Nokia established a new structure to create four core business units: Mobile Network; IP and Fixed Networks; Cloud and Network Services; and Nokia Technologies. The company said the new model was optimised for better accountability and transparency, increased simplicity and improved cost-efficiency.
In the latest statement, Lundmark said each group had identified a clear path to “sustainable, profitable growth” and were resetting their cost bases to invest in the future.
“Each business group will aim for technology leadership. In those areas where we choose to compete, we will plan to win.”
Nokia said it will reveal more strategy details for each business unit at its Capital Markets Day on 18 March.
