Amid tough conditions in the telecommunications market, Nokia is taking steps to lower expenses by letting go of 2,000 employees in Greater China and intending to trim 350 positions in Europe. These workforce reductions form part of a larger plan to achieve savings of up to 1.2 billion euros by 2026.
According to a source familiar with the matter, Nokia has recently downsized its workforce in Greater China by letting go of around 2,000 employees, which accounts for roughly one-fifth of its total workforce in the region. This strategic decision to reduce costs comes as the Finnish telecommunications giant faces challenges in the slow-moving telecom equipment market. Additionally, Nokia is also set to trim 350 positions in Europe as part of its restructuring efforts.
Nokia’s annual report for December 2023 stated that the company had a workforce of 10,400 individuals in Greater China and 37,400 employees in Europe.
According to the report, a Nokia representative has verified that the company is in the process of discussing potential layoffs of 350 staff members in Europe. Yet, they have chosen not to provide any comments regarding Greater China.
Nokia intends to reduce its workforce by 14,000 employees by the year 2026.
Nokia’s strategy for 2023 involves a significant workforce reduction, aiming to trim down up to 14,000 jobs. The goal is to achieve cost savings ranging from 800 million euros ($868 million) to 1.2 billion euros by 2026. With a current workforce of approximately 86,000 employees, Nokia anticipates scaling down its staff to a range of 72,000 to 77,000 employees within the upcoming two years.
Nokia’s recent workforce reductions, as reported by sources, are a key component of their strategic initiative. Confirming this, a spokesperson stated that Nokia has successfully realized savings amounting to 500 million euros. CEO Pekka Lundmark emphasized the importance of maintaining R&D efficiency during cost-cutting measures, expressing satisfaction with the progress made and noting that they are slightly exceeding their initial schedule.
Exploring the Potential Impact of the ‘Huawei Ban’
Nokia used to consider China its second-biggest market until western nations began prohibiting Huawei (HWT.UL) in 2019. This resulted in a decrease in contracts from Chinese telecommunications companies for both Nokia and Ericsson.
Nokia maintains a number of offices in Beijing and Shanghai, as well as in Hong Kong and Taiwan, all falling under the umbrella of the company’s Greater China operations.
