Nokia axes 180 jobs in Finland to keep up with Ericsson and Huawei in 5G

The Finnish telecom equipment maker Nokia has announced that up to 180 jobs will be reduced in Finland, as part of its on-going cost-saving programme.

Nokia announced on Tuesday that up to 180 jobs in Finland will be lost this year, as part of the company’s cost saving programme. According to the company announcement, “the plans concern all Nokia´s business groups and support functions and target all sites in Finland. The biggest impact is expected to take place in Espoo,” where the company’s headquarters are located.

The company was keen to stress that 5G programmes will not affected. “The negotiations will not impact our 5G product development or the base station factory in Oulu (in northern Finland),” said Tommi Uitto, Nokia’s President of Mobile Networks, in the announcement. “We expect to make further investment in both 5G and digitalisation, There are also plenty of vacancies to be filled in the mobile network unit in Finland, and we hire people for specific tasks as fast as we can.” The company added 370 new positions in Finland in 2019, according to Uitto.

This is the second time that Nokia has axed its workforce in as many years. A year ago, the company announced to reduce the number of positions by 350, as part of the €700 million cost saving programme launched in 2018. The target has since been reduced to €500 million as Nokia has decided to beef up the investment to improve its competitiveness in the 5G market. The company lost a third of its market value after it lowered the outlook last October, citing competitive pressure including pressure on 5G product prices, apparently alluding to the aggressiveness of its main competitors Ericsson and Huawei.

To achieve the cost saving target, in addition to reducing the payroll, Nokia is also “simplifying our processes and tools as well as using digitalization to boost automation and productivity; improving R&D productivity through new ways of working and automation as well as a reduction in R&D in legacy products; and consolidating certain cross-company activities, ensuring that we have the right balance across the geographies in terms of real estate and reducing other overhead costs,” Nokia said in a reply to Telecoms.com’s enquiry.

Finland’s leading broadsheet Helsingin Sanomat commented that reducing workforce size is not a big surprise in Finland and may also happen in other markets. Nokia’s acquisition of Alcatel-Lucent has resulted in big job losses, due to overlapping functions and business focus realignment. Nokia promised to support the staff affected by the latest round of reduction. This would include its long-running “Bridge” support programme to “help employees transition to new positions or careers. In addition, the company foresees possibilities of redeployment for those possibly affected by the planned changes,” Nokia said in reply.