Finnish telecommunications and electronic major Nokia on Tuesday announced plans to cut up to 10,000 jobs within the next two years to trim costs and invest more in research capabilities. This comes even as the group seeks to step up its challenge to Sweden's Ericsson and China's Huawei.
Chief Executive Pekka Lundmark has been making changes to recover from product missteps under Nokia's previous management that hurt its 5G ambitions and dragged on its shares. He announced a new strategy in October last year where Nokia will have four business groups and said that the company would "do whatever it takes" to take the lead in 5G.
It is expected that the Chief Executive would present his long-term strategy, discuss action plans and set financial targets during the company's capital markets day on Thursday. Nokia said in a statement it expects about 600 million euros ($715 million) to 700 million euros of restructuring and associated charges by 2023.
"Decisions that may have a potential impact on our employees are never taken lightly. My priority is to ensure that everyone impacted is supported through this process," Lundmark said in a statement. Nokia currently employs 90,000 and has cut thousands of jobs following its acquisition of Alcatel-Lucent in 2016.
The current restructuring is expected to lower its cost base by about 600 million euros by the end of 2023. Half of the savings are expected to be realised in 2021 itself. The telecommunications and electronic major plans to increase investments in research and development and future capabilities including 5G, cloud and digital infrastructure.
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