Nokia has left an indelible mark on the tech industry, but in recent years, it has had a much harder time keeping up with the other brands that have taken away large sections of its customer base. News of the Nokia layoffs has been a key point of discussion ever since it announced its plans to cut 14,000 jobs around this time last year.
The cost-cutting layoffs at Nokia have been unfolding gradually as the company determines the best areas to retain key elements of the business. Now, Nokia’s global layoffs and restructuring efforts will center around China and Europe as part of its overall plan to reduce costs by 2026.
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Nokia’s Layoffs Plans Take Another Step Forward
Finland-based company Nokia has announced 2000 job cuts in Greater China and another 350 cuts in Europe. The Nokia layoffs in China will reportedly affect 20% of its team, which is a very big step forward for the telecommunications company.
Towards the end of 2023, the company had 10,400 employees in Greater China and another 37,400 employees in Europe. The change in company numbers will still leave large, well-functioning teams in both regions, but we have not seen any reports on how the outgoing employees will be compensated.
Nokia’s cost-cutting layoffs in China are largely in part due to the sanctions against Chinese businesses that have cropped up across the US and are threatening to rise in Europe as well. Companies like Huawei, ZTE, Hikvision, Dahua, and Hytera, have been outright banned in the US, and according to reports, the contracts from Chinese telecom operators have been reduced for both Nokia and Ericsson.
Nokia has multiple offices across Beijing, Shanghai, Hong Kong, and Taiwan, and the exact split of the layoffs and which teams will be affected have not been disclosed. The specifics of the job cuts in Europe are even fewer as sources have declined to comment on the operations.
The shifting socio-political landscape is believed to have played a significant role in cost-cutting layoffs at Nokia, and other similar repercussions across businesses can be expected over the next few years.
Nokia’s Global Restructuring Efforts Have Been Progressing Smoothly
In February, the company eliminated around 250 positions from its operations in India, which was tagged as a region of growth for the organization but did not prove to be as profitable as expected. The restructuring in the country had involved a change in leadership as well, with Tarun Chhabra taking on the role of the new head of Indian operations.
But why is Nokia cutting jobs? Finnish company Nokia’s global restructuring efforts are part of its plans to save between €800 million ($869 million) and €1.2 billion ($1.3 billion) by 2026. The plan is to ensure around 400 million euros of savings in 2024, along with another 300 million euros saved in 2025. The company is currently ahead of its targets for the year, with 500 million euros of gross savings following its restructuring strategy.
According to Reuters, the company hopes to reduce its employee base to fall between 72,000 and 77,000, down from 86,000. On the higher end, this could mean a 16% reduction in its workforce by 2026. Research and development teams might be protected, but the exact teams to be affected remain unclear.
The cost-saving layoffs at Nokia are only a part of the overall strategy to bring the business back into order, but the company has not revealed the other strategic changes that are being made to support its goal.
Layoffs have been a primary part of cutting costs across organizations and industries. Social networking company Meta is also restructuring the organization and its different wings, while aerospace manufacturing companies like Airbus and Boeing are in the midst of their own struggles to maintain their position in their industry. Nokia competitor Ericsson is also faced with similar challenges but most of these businesses aim to stabilize themselves by 2026.
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Publish date : 2024-10-26 03:02:00
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