Nokia to cut thousands of jobs following Alcatel deal

April 8, 20169:15 am351 views
Nokia to cut thousands of jobs following Alcatel deal
A view of Nokia's head offices in Espoo, Finland. Photo: Reuters

Telecom network equipment maker Nokia is planning to cut thousands of jobs worldwide, including 1,400 in Germany and 1,300 in its native Finland, as part of a cost-cutting program following its acquisition of Alcatel-Lucent.

Finland’s biggest company has cut thousands of Finnish jobs over the past decade as its once-dominant phone business was eclipsed by the rise of smartphone rivals. The phone business was eventually sold to Microsoft , which has continued cutting jobs in the recession-hit country.

Now focused on telecoms network gear, Nokia is looking to reduce operational costs by 900 million euros ($1.03 billion) by 2018 after its recent 15.6 billion euro ($17.7 billion) all-share deal for Franco-American rival Alcatel-Lucent.

The acquisition is intended to help Nokia to compete with Sweden’s Ericsson and China’s Huawei in a market where limited growth and tough competition are pressuring prices.

Shares in Nokia rose 0.9 percent following Wednesday’s announcement, but the latest job cuts caused consternation in Finland after Nokia said it will cut only 400 jobs in France while creating 500 posts in research and development in the country, in line with a pledge to the French government during the Alcatel negotiations.

Nokia declined to give a total figure for global job losses but said it was starting talks with employee representatives in about 30 countries. The company employs about 104,000 worldwide, with around 6,850 in Finland, 4,800 in Germany and 4,200 in France.

“This (1,300) is a terrible figure; we have a rather difficult employment situation in the sector to begin with,” said Pertti Porokari, chairman of the Union of Professional Engineers in Finland. “Seems that Finnish workers have lost this match (against the French).”

Finland’s economy minister Olli Rehn said: “The news on Nokia’s new plans is very regrettable … we expect Nokia to bear social responsibility and partly take care of training of those whose employment will be terminated.”

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