Nokia to resize and reset costs to become more profitable

In a bid to reposition itself and deliver profitable growth, Finnish telecom major – Nokia would be laying off 1,500 employees in India. It is reducing 10,000 employees globally over the next 18 to 24 months as part of the company’s restructuring plans.

Nokia’s R&D centre in Bengaluru is one of the four main global R&D sites for the company, employing over 6,000 people undertaking research in various advanced global telecommunication technologies like 2G, 3G, 4G, 5G, small cells, and Wi-Fi. The company’s global delivery centres in Chennai and Noida employ over 4,000 people who provide support at various stages of networks across 103 countries.

Pekka Lundmark, CEO of Nokia, recently said that the company has a clear and detailed plan for how it will reset the business, accelerate competitiveness and scale up its lead in the markets it wants to play in. In an official press statement, Lundmark said Nokia 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. Each business group will aim for technology leadership. In those areas where we choose to compete, we will play to win. We are therefore enhancing product quality and cost competitiveness, and investing in the right skills and capabilities.”

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In October, 2020, the company had announced a new operating model designed to better position the company for changing markets and align with customer needs. The new model is optimized for better accountability and transparency, increased simplicity and improved cost-efficiency. As such, the company expects to lower cost base of approximately EUR 600 million by the end of 2023. These savings will take place gradually and will offset increased investments in R&D, future capabilities and costs related to salary inflation. Additional long-term benefits include streamlining its portfolio and reducing site fragmentation.