Nokia to cut up to 10,000 jobs worldwide

Nokia is to cut up to 10,000 jobs as it looks to take €600m of costs out of the business, the Finnish telecoms firm announced on Tuesday.

The restructuring, which will take place over an 18 to 24 month period, is expected to leave Nokia with between 80,000 and 85,000 employees. It currently employs around 90,000 people worldwide.

The savings achieved will be used to boost investment in research and development and future capabilities, including 5G, cloud and digital infrastructure.

Pekka Lundmark, who took over as chief executive last year, said: "Nokia now has four fully accountable business groups. Each of them has identified a clear path to sustainable, profitable growth and they are resetting their cost bases to invest in the future."

The restructuring is expected to cost Nokia around €600m to €700m by 2023. A spokesperson told Reuters the job cuts would be global, with most countries "likely affected". However, France has been excluded after Nokia cut 1,000 jobs there last year.

Lundmark is looking to overhaul Nokia after a turbulent period which saw it slash profit forecasts and suspend dividend payments.

In October, he announced plans to divide the company into four core units and on Tuesday said: "Each business group will aim for technology leadership. In those areas where we choose to compete, we will play to win. We are therefore enhancing product quality and cost competitiveness, and investing in the right skills and capabilities."

Janardan Menon, analyst at Liberum, said: "Nokia’s challenge is to be able to increase R&D spending to catch up with Ericsson, while not dropping profitability below already low levels. The reduction in cost base partly address this issue, though the time horizon to achieve it seems fairly long.

"We remain cautious on the medium term outlook and the expect the non-IFRS operating margin in 2021 to be at the low end of the guided 7%-10% range."