Layoffs at Nokia lead to workforce cuts in China and Europe

Nokia has left an indelible mark on the technology industry, but in recent years it has found it much harder to compete with the other brands that have taken away large chunks of its customer base. News of the layoffs at Nokia has been a key point of discussion since the company announced its plans to cut 14,000 jobs this time last year.

Nokia’s cost-cutting layoffs have been gradual as the company identifies the best areas to retain key elements of the business. Now Nokia’s global layoffs and restructuring efforts will focus on China and Europe as part of its overall plan to cut costs through 2026.

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Nokia’s layoff plans take another step forward

Finland-based Nokia has announced 2,000 job cuts in Greater China and a further 350 job cuts in Europe. The layoffs at Nokia in China will reportedly affect 20% of the Nokia team, marking a very big step forward for the telecommunications company.

At the end of 2023, the company employed 10,400 people in Greater China and another 37,400 people in Europe. The change in company numbers will continue to leave large, well-functioning teams in both regions, but we have not seen any reports on how the departing employees will be compensated.

Nokia’s cost-cutting layoffs in China are largely due to the sanctions against Chinese companies that have been imposed across the United States and are threatening to increase in Europe. Companies such as Huawei, ZTE, Hikvision, Dahua and Hytera have been banned outright in the US, and Chinese telecom operators’ contracts have reportedly been cut for both Nokia and Ericsson.

Nokia has several offices in Beijing, Shanghai, Hong Kong and Taiwan. The exact breakdown of the layoffs and the teams affected were not disclosed. Details of the job cuts in Europe are even more sparse as sources declined to comment on the measures.

The changing socio-political landscape is believed to have played a major role in Nokia’s cost-cutting layoffs, and similar impacts are expected to continue across companies in the coming years.

Nokia’s global restructuring efforts went smoothly

In February, the company cut about 250 jobs from its operations in India, which was considered a growth region for the company but did not prove as profitable as expected. The restructuring in the country had also seen a change in leadership, with Tarun Chhabra taking on the role of the new head of India operations.

But why is Nokia cutting jobs? Finnish company Nokia’s global restructuring efforts are part of its plans to save between 800 million euros ($869 million) and 1.2 billion euros ($1.3 billion) by 2026. The plan is to ensure savings of around €400 million by 2024 and a further €300 million saved in 2025. With €500 million in gross savings from its restructuring strategy, the company is currently ahead of its annual targets.

Accordingly ReutersThe company hopes to reduce its workforce from 86,000 to 72,000 to 77,000. At the high end, this could mean a 16% reduction in workforce by 2026. Research and development teams could be protected, but the exact teams that will be affected remain unclear.

The cost-cutting layoffs at Nokia are just one part of the overall strategy to turn the business around, but the company has not disclosed the other strategic changes it is making to support its goal.

Layoffs have been a major factor in reducing costs across all companies and industries. Social networking company Meta is also restructuring the organization and its various wings, while aerospace manufacturers such as Airbus and Boeing are in the midst of their own difficulties maintaining their position in their industries. Nokia competitor Ericsson also faces similar challenges, but most of these companies want to stabilize by 2026.