Nokia to cut up to 10,000 jobs over next two Years to trim costs and invest in research

Finnish telecoms group Nokia said on Tuesday it planned to cut up to 10,000 jobs within the next two years to trim costs and invest more in research capabilities, as part of its restructuring plan.

After taking over the top job last year, Chief Executive Pekka Lundmark has been making changes in a bid to transform the company to better compete with Nordic rival Ericsson.

File picture shows a man walking past a Nokia logo during the Mobile World Congress in Barcelona February 28, 2012. Nokia gave an upbeat forecast for its telecom equipment unit Nokia Solutions and Networks (NSN), giving hope for a pickup in what will be the Finnish company's main business after the sale of its phones division to Microsoft. Shares in Nokia rose 6 percent after the company forecast NSN's profit margin would improve in the fourth quarter to around 12 percent, plus or minus 4 percentage points, from 8.4 percent in the third quarter. Picture taken February 28, 2012. REUTERS/Albert Gea/FilesREUTERS

He announced a new strategy in October, under which Nokia will have four business groups and said the company would "do whatever it takes" to take the lead in 5G, as it banks on also capturing share from Huawei.

Lundmark is expected to present his long-term strategy, discuss action plans and set financial targets during the company's capital markets day on Thursday.

The company said in a statement it expects about EUR 600 million to EUR 700 million

The company said in a statement it expects about EUR 600 million (roughly Rs. 5,190 crore) to EUR 700 million (roughly Rs. 6,060 crore) of restructuring and associated charges by 2023.

"Decisions that may have a potential impact on our employees are never taken lightly," Lundmark said in a statement. "My priority is to ensure that everyone impacted is supported through this process.

Illustration picture shows Nokia logo on used cell phones, in Zurich, April 30, 2012.Reuters/Christian Hartmann/Fil

Nokia expects the restructuring to lower the its cost base by about EUR 600 million (roughly Rs. 5,190 crore) by the end of 2023. Half of the savings are expected to be realised in 2021.

These savings will offset increased investments in research and development and future capabilities and costs related to salary inflation, the company said.

In February Nokia forecast 2021 revenue to fall to between EUR 20.6 billion (roughly Rs. 1,78,300 crore)- EUR 21.8 billion (roughly Rs. 188,680 crore) from EUR 21.9 billion (roughly Rs. 1,89,520 crore) in 2020.

While both Nokia and Ericsson have been gaining more customers as more telecom operators start rolling out 5G networks, the Swedish company has got an edge partly due to it winning 5G radio contracts in China.

Nokia has not won any 5G radio contract in China and had also lost out to Samsung Electronics on a part of a contract to supply 5G equipment to Verizon.