Nokia to slash thousands of jobs worldwide

Nokia says the reduced headcount is necessary in the aftermath of acquiring Alcatel-Lucent.

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Nokia

Nokia is planning to axe thousands of jobs on the back of acquiring Alcatel-Lucent in order to cut costs and restructure the business.

The Espoo, Finland-based firm said on Wednesday that in order to hit a cost-cutting target of 900 million euros by 2018, employee expense must be brought down.

While Nokia did not give specific figures on how many employees will lose their jobs internationally, according to Reuters, 1,400 members of staff in Germany and 1,300 in Finland will be axed.

In France, 400 jobs will also be slashed -- but in line with a deal struck between Nokia and the French government over the Alcatel-Lucent acquisition, 500 posts in research and development will also be created.

It is unknown how many more Nokia employees are soon to be given their marching orders. The cuts may only affect Germany and Finland, or more of the 104,000 employees worldwide may be facing the chop. If 900 million euros are to be saved annually, the costs to staff could be high.

However, Nokia is having meetings with work councils and representatives in almost 30 countries, and so it is likely cuts will happen in more than these two areas.

The majority of cuts will happen in places of "overlap," according to Nokia. Research and development, sales and corporate offices are likely to come under fire between now and the end of 2018.

Nokia also plans to cut costs in real estate, services, procurement, supply chain and manufacturing.

At the same time, Nokia is turning towards more lucrative revenue streams for the future, such as 5G networking, the cloud and the Internet of Things (IoT).

Nokia's announcement follows the acquisition of Alcatel-Lucent in April last year. The all-share merger deal, worth €15.6 billion, has made it necessary for Nokia to shake up its current business and cut away unnecessary employees and units before the merger is finalised.

"These actions are designed to ensure that Nokia remains a strong industry leader," said Nokia President and CEO Rajeev Suri.

"When we announced the acquisition of Alcatel-Lucent we made a commitment to deliver 900 million [euros] in synergies - and that commitment has not changed. We also know that our actions will have real human consequences and, given this, we will proceed in a way that that is consistent with our company values and provide transition and other support to the impacted employees."

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