Nokia plans to cut up to 10,000 jobs and take the savings to invest in its 5G networking business.
The restructuring, announced by Nokia Tuesday, will save EUR 600 million by the end of 2023. According to Nokia, the savings from the restructuring will gradually be reinvested in new products and research and development.
Nokia plans to outline its strategy and long-term outlook during its Capital Market Day on Thursday.
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Target markets for Nokia will be 5G, cloud and digital infrastructure.
Nokia added that it will take charges of EUR 600 million to EUR 700 million with 50% of that hit to land in 2021. The remainder of the charges will be taken in 2022 and 2023.
The company added that the total amount of job cuts will be determined by market conditions. Ultimately, Nokia expects to have a workforce of 80,000 to 85,000 down from 90,000 today.
As for the restructuring, Nokia will form three business groups.
Mobile Networks will focus on 5G and wireless mobility networks. Nokia plans to streamline its portfolio in mature and declining markets such as 4G.
Cloud and Network Services will move to more of an as-a-service model and refocus on emerging growth opportunities. To that end, Nokia announced partnerships with AWS, Microsoft and Google Cloud on March 15.
Network Infrastructure will remain largely unchanged but spend on advancing Nokia's portfolio via more R&D.
In February, Nokia reported better-than-expected fourth quarter results with sales of €6.6 billion and €0.14 a share. In 2020, Nokia delivered sales of €21.9 billion.