Nokia Layoffs: Up To 10K Jobs To Be Sliced In 5G-Focused Restructuring

The telecom and consumer electronics heavyweight is feeling the pressure from its rivals and plans to use the salary-related funds on 5G R&D.

Telecom and consumer electronics giant Nokia has revealed plans to cut up to 10,000 jobs as part of a companywide restructuring to help the firm better compete against the likes of its global telecom competitors that are going big in the 5G space, including Ericsson and Huawei.

The restructuring would leave Nokia with a workforce of between 80,000 to 85,000 compared to about 90,000 employees today. The overhaul will be implemented over a period of 18 to 24 months, according to the Espoo, Finland-based company.

Nokia said its new company structure will include four core business units: Mobile Network; IP and Fixed Networks; Cloud and Network Services; and Nokia Technologies. The company said the new model would promote accountability and transparency, increased simplicity and improved cost-efficiency. Each business unit will strive for technology leadership, according to Nokia.

The freed-up funds, which the company said would largely be coming from salary-related costs, would make way for more 5G networking research and development dollars, Nokia said.

[Related: Nokia To Modernize Its IT Infrastructure On Google Cloud]

“In those areas where we choose to compete, we will play to win,” Nokia CEO Pekka Lundmark said in a statement. ”We are therefore enhancing product quality and cost competitiveness, and investing in the right skills and capabilities.”

Lundmark took over from the company‘s former CEO Rajeev Suri in August. The latest moves follow a sweeping restructure plan the new CEO announced in October 2020.

Specifically, Nokia wants to invest more into 5G to chase after its telecom rivals in which Nokia is lagging behind. The job cuts announcement follows the restructure plan that Lundmark laid out in October, noting that Nokia would “do whatever it takes” to return to a strong market position and lead in the 5G space.

Wireless edge networking specialist Cradlepoint in September revealed that Swedish telecom equipment giant Ericsson, one of Nokia's largest competitors, would be acquiring the company for $1.1 billion.

Together, Cradlepoint is helping Ericcson unlock the power of LTE and next-generation cellular technologies, such as 5G, Cradlepoint told CRN.

Today, Nokia partners with the likes of Microsoft for cloud solutions. The company earlier this week revealed a new partnership with Amazon Web Services and Google for application development.

Nokia said it will offer up further strategy details for each of its new business units at its Capital Markets Day later this month.