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Nokia Will Slash Up To 10,000 Jobs Globally In The Next Two Years


03/16/2021


Nokia Will Slash Up To 10,000 Jobs Globally In The Next Two Years
The Finish telecom equipment making giant Nokia us planning to implement its previously announced restructuring program with an initial slashing of up to 10,000 jobs of the company all over the world over the next two years. At the same time the company is also preparing to increase its spending on research and development and enhancing its 5G capabilities to be able to rivals Ericsson and Huawei.
 
This restructuring of the company will result in its employee numbers reducing from the current 90,000 to about 80,000 globally. The company also expects to save in costs of about $716 million annually by the end of 2023 from this restructuring. According to the company, the cost to the company for the restructuring at the company will be between $716 million and $835 million by 2023 out of which about half would be expended in 2021 itself.
 
The new strategy of the company also increases increasing expenditure in R&D and other programs including in 5G, cloud computing and digital infrastructure so that it is able to better compete with its major rivals in the telecom equipment making industry including Ericsson and Huawei.
 
Nokia’s restructuring plan is “a massive program” which reflects “the pace of change in the [telecom] industry,” said Kimmo Stenvall, an equity analyst at OP Financial Group in Helsinki, in an interview.
 
“Nokia now has four fully accountable business groups. Each of them has identified a clear path to sustainable, profitable growth and they are resetting their cost bases to invest in their future,” said Pekka Lundmark, Nokia’s president and CEO. “Each business group will aim for technology leadership. In those areas where we choose to compete, we will play to win.”
 
At the time when Lundmark was appointed as the head of Nokia, he introduced the strategy of the company to bring in changes so that it is more effectively able to compete with its Swedish rival Ericsson. A warning about the financial difficulties to be faced by the company 2021 was issued by Lundmark in October last year, and added that the company will need to make more investments in R&D.
 
“We have decided that we will invest whatever it takes to win in 5G,” Lundmark said at the time. “Our customers are counting on us and we will be there for them.”
 
In the area of roll out of 5G networks, even though both Nokia and Ericsson have managed to bag contracts, analysts feel the Ericsson has fared better than Nokia partly because it has been able to win large contracts for setting up 5G networks in China. 
 
"We have not yet made a breakthrough in 5G [in China] but of course we are not excluding that possibility going forward," Lundmark had said in an interview back then. The company also said that it was also hit by a loss of 5G contract in the United States to Korean firm Samsung Electronics.
 
It is expected that Nokia will soon launch this new long-term strategy and declare its financial goals. According to Zacks Investment Research, analysts at Wall Street expect Nokia to report revenues of $5.87 billion for the fiscal first quarter of the current year compared to $5.42 billion in the same period a year ago.
 
Nokia is expected to release its next quarterly earnings report in late April.
 
(Source:www.forbes.com)


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