Nokia announced plans to reduce its employee headcount from 90,000 today to 80,000 to 85,000 range over an 18–24-month period. This is expected to lower the company’s cost base by approximately EUR 600 million by the end of 2023.
Nokia said the action was necessary to offset increased investments in R&D, future capabilities and costs related to salary inflation.
“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 their future,” said Pekka Lundmark, President and CEO.
“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,” Lundmark continued.
More details:
- Mobile Networks will further invest in 5G R&D and accelerate efforts to digitalize processes and tools across the value chain. It will streamline its portfolio and reduce investment levels in mature or declining parts of the portfolio; continue to reduce site fragmentation; reduce overlapping activities and drive further cost efficiencies.
- Cloud and Network Services’ customers are shifting away from owning products to consuming outcomes, delivered as-a-service from the cloud. The business group’s priorities and how it operates must align with this shift. The group will align portfolios and streamline service models; strengthen technology leadership by refocusing R&D resources to emerging growth opportunities; streamline operations and support functions and increase productivity through reduced site fragmentation.
- Network Infrastructure will remain largely unchanged although it will increase its R&D investments and plan for new capabilities in order to meet customer demand and support portfolio innovation. Additionally, by fully realizing the cost efficiencies offered by Nokia’s new operating model it anticipates streamlining SG&A costs as a percentage of sales.
Nokia Technologies will remain largely unchanged.