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Updated March 16th, 2021 at 21:55 IST

Nokia to layoff 10,000 jobs in next two years for cost-cutting, to focus on 5G technology

Finnish telecommunications networks provider Nokia to slash up to 10,000 jobs over the next two years. This would help in the development of 5G technology.

Reported by: Apoorva Kaul
Nokia
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Finnish telecommunications networks provider Nokia is going to slash up to 10,000 jobs over the next two years. The company has made this decision to reduce costs by 600 million ($715 million) by 2023. The telecom-equipment maker said the cost cuts will result in increased investment in cloud computing and digital infrastructure research. The Finnish company didn’t specify the countries or geographical areas affected by the decision. 

Cost-cutting in Nokia company

After taking over as Chief Executive, Pekka Lundmark said that the cost-cutting would help in the development of 5G technology, salary inflations and other areas that will benefit in the long term. The company presently has 90,000 employees which will be cut down to 80,000 to 85,000 employees in the next two years. The company in a statement said that market development in the next two years will determine the exact number of job losses. 

“Planned restructuring is expected to result in an 80,000-85,000 employee organization, over an 18-24-month period, instead of the approximately 90,000 employees Nokia has today.”

The company chief executive further said that the company needs to compete in the areas they choose and they have to play to win. He said that the company will do whatever it takes to win at 5G. He added that the company will enhance product quality and cost-effectiveness. Nokia competes with China’s Huawei and Sweden’s Ericsson and lately also with South Korea’s Samsung in the new generation of broadband technology. After taking over as chief executive Lundmark has made several changes in the company. He had scrapped end to end solutions strategy and replaced it with a more focused approach and pledging to invest in 5G technology. 

Dip in Nokia profit

Meanwhile, in February, Nokia reported a smaller than expected drop in profit in the fourth quarter while it acknowledged it was facing some challenges in the race for 5G networks, particularly in the North American market. The company based in Espoo, Finland, saw net profit for the October-December period drop 1% to 811 million euros ($973 million). Sales were down 5% to 6.6 billion euros.

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Published March 16th, 2021 at 21:55 IST

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