Nokia says it could possibly cut up to 10,000 jobs within the next two years as the company restructures; it plans to focus on its cost bases and invest in R&D and future technologies like 5G and digital infrastructure. Currently, Nokia has 90,000 employees. The company said Tuesday that number will be rolled back to 80,000 or 85,000 within the next 18 to 24 months.
“Decisions that may have a potential impact on our employees are never taken lightly. Ensuring we have the right setup and capabilities is a necessary step to deliver sustainable long-term performance. My priority is to ensure that everyone impacted is supported through this process,” Nokia President/CEO Pekka Lundmark said in a statement.
“On a group level, this is expected to lower the company’s cost base by approximately EUR 600 million by the end of 2023,” the announcement says. That’s just over U.S.$714 million. “These savings will offset increased investments in R&D, future capabilities and costs related to salary inflation.”
The announcement of investing in research and new technology, including 5G and cloud and digital infrastructure, comes months after the company said it would be running under a new operating model, according to The Hill. “The new model is optimized for better accountability and transparency, increased simplicity and improved cost-efficiency,” the company said.
Nokia and other companies have been pressured to step up as a major 5G equipment provider in the U.S. to compete with Chinese-based company Huawei. The amount of money Nokia plans to spend for restructuring by 2023 ranges from $700 million to $800 million, reports The Hill.
On Thursday, Nokia’s business groups will provide further updates about the company’s future strategies and financial outlook assumptions on what the company calls “Capital Markets Day.”