Nokia has reportedly laid off 2,000 employees or about a fifth of its employee base across Greater China. The move is part of efforts to lower costs as the Finnish company struggles with a sluggish telecom equipment market, reports Reuters citing a person familiar with the matter. In addition, the company is planning to cut 350 jobs in Europe.
According to the company’s annual report, as of December 2023, Nokia had 10,400 employees and 37,400 employees in Greater China and in Europe, respectively.The report claims that a Nokia spokesperson has confirmed the company had opened consultations relating to laying off 350 employees in Europe. However, it declined to comment on Greater China.
Nokia plans to cut 14,000 jobs by 2026
As per the report, Nokia laid out plans in 2023 to cut up to 14,000 jobs to reduce costs and save between 800 million euros ($868 million) and 1.2 billion euros by 2026. It then had total employees of about 86,000 and planned to reduce its base to between 72,000 and 77,000 employees in the next two years.
According to the sources, the latest job cuts are part of that plan. Nokia has already achieved 500 million euros of gross savings, the spokesperson said. CEO Pekka Lundmark said “We are not doing cost cutting in such a way that we would sacrifice our R&D output. I am happy with the pace of cost reduction. We are actually a bit ahead of the schedule that we had.”
How ‘Huawei ban’ could be the reason
China was once Nokia’s second-largest market before western countries started banning Huawei (HWT.UL) from 2019. Consequently, contracts from Chinese telecom operators reduced for both Nokia and Ericsson.
Nokia still has several offices in Beijing and Shanghai, along with Hong Kong and Taiwan, which are part of the company’s Greater China region.