Nokia has recently cut nearly 2,000 jobs in Greater China, which is about 20 percent of its workforce there. The company also plans to let go of another 350 employees in Europe as part of its efforts to save money. A representative from Nokia confirmed the layoffs in Europe but did not provide details about the situation in China.
As of December 2023, Nokia employed around 10,400 people in Greater China and 37,400 in Europe. Last year, the company announced plans to reduce its workforce by up to 14,000 jobs, aiming to save between 800 million and 1.2 billion euros by 2026. These recent job cuts are part of that larger goal.
What is happening?
Nokia used to be very successful in China, which was its second-biggest market. However, after several Western countries banned Huawei starting in 2019, Nokia and another major company, Ericsson, received fewer contracts from Chinese telecom operators.
In 2019, around 27 percent of Nokia's sales came from Greater China. Today, that figure has dropped to under 6 percent. Despite these challenges, Nokia still operates several offices in major cities like Beijing and Shanghai, as well as in Hong Kong and Taiwan, where it continues to support clients like China Mobile.
Recently, Nokia reported a 9 percent increase in its operating profits for the third quarter, mostly due to its cost-cutting measures. However, its overall sales did not meet expectations, causing the company’s shares to fall by 4 percent. So far, Nokia has achieved 500 million euros in cost savings.
CEO Pekka Lundmark mentioned that the company is focused on cutting costs without compromising its research and development efforts, and he expressed satisfaction with the progress they’ve made. When Nokia first announced the job cuts last year, it had roughly 86,000 employees and aimed to reduce this number to between 72,000 and 77,000 by 2026. Currently, its workforce stands at just over 78,500 employees.
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Inputs from Reuters
