NOKIA SACRIFICES ITS EMPLOYEES IN FAVOR OF RESEARCH AND DEVELOPMENT
Reuters reports that the Finnish telecom group Nokia said today that the corporate plans to get off 5,000 to 10,000 employees within the next two years to chop costs and increase investment in research and development. While many of us will lose their jobs, this is often an important move for Nokia. Otherwise, it can’t intensify its challenge to Ericsson and Huawei. Moreover, in February, the corporate announced that its forecast 2021 revenue will fall to between 20.6-21.8 billion euros from 21.9 billion euros in 2020.
WHY DOES NOKIA LAYOFF numerous EMPLOYEES?
Nokia said during a statement that by 2023, restructuring and related expenses will reach approximately 600 million to 700 million euros.
‘Decisions which will have a possible impact on our employees are never taken lightly,’ Lundmark said during a statement. ‘My priority is to make sure that everybody impacted is supported through this process.’
The company said it’ll reduce the entire number of worldwide employees to 80,000 – 85,000. However, this may happen within the next 18 to 24 months. As now, there are 90,000 employees, it seems Nokia will lay off 11% of its employees.
‘These plans are global and certain to affect most countries,’ a Nokia representative said. ‘In Europe, we’ve barely informed local works councils and expect the consultation processes to start out shortly, where applicable.’ However, France, where Nokia cut quite 1000 jobs last year, was excluded from the present restructuring.
NOKIA’S LAYOFFS aren’t SURPRISING
Nokia’s new chief executive Pekka Lundmark said the corporate will ‘do whatever it takes’ to win within the 5G field. He said: ‘In those areas where we elect to compete, we’ll fight to win. Therefore, we are improving product quality and price competitiveness, and investing in appropriate technologies and capabilities.’
In fact, those that follow Nokia news, should know that something like this has been prepared since 2020. After taking the position, Pekka Lundmark started making changes to get over product missteps under the company’s previous management that hurt its 5G ambitions and dragged on its shares.
In this regard, last October, he announced that Nokia will adopt a replacement strategy. it’s getting to have four business groups.