Nokia Restructures: 2,000 Jobs Cut Amid Strategic Shift | VoIP Review

Nokia recently announced a significant workforce reduction, impacting more than 2,000 jobs in China and Europe. This move is part of a wider strategic restructuring plan to eliminate up to 14,000 positions globally by 2026, aiming for cost savings between €800 million and €1.2 billion.

As detailed in a report by Reuters, Nokia will lay off approximately 2,000 employees in China, accounting for 20% of its workforce there. An additional 350 jobs are expected to be cut in Europe. Nokia’s spokesperson confirmed ongoing discussions regarding the European layoffs but declined to comment on the situation in China.

As of December 2023, the company employed 10,400 individuals in Greater China and 37,400 across Europe. The current layoffs reflect Nokia’s response to a reduction in market contracts following bans on Huawei from Western countries since 2019. This has led to diminishing sales in China, historically Nokia’s second-largest market, which now accounts for less than 6% of net sales, a sharp decline from 27% in 2019. Despite reduced contracts, Nokia maintains offices in strategically important locations such as Beijing, Shanghai, Hong Kong, and Taiwan, serving major clients like China Mobile.

Earlier this year, the job reduction process started affecting key markets, including Nokia’s home base in Finland and the United States. In a statement about these measures, Pekka Lundmark, Nokia’s CEO, remarked that “resetting the cost base is a necessary step to adjust to market uncertainty and to secure our long-term profitability and competitiveness.”

Despite the operational downsizing, Nokia reported a 9% increase in Q3 operating profit, mainly due to previous cost-cutting measures. However, net sales did not meet projections, resulting in a 4% decrease in share value. Lundmark assured that these cost-reduction steps would not affect the company’s research and development activities. Additionally, Nokia is reportedly ahead of schedule in its savings plan.