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Nokia has announced a major reduction in its headcount as it eyes up €900m (£730m) of operating cost synergies in the two-year period following its acquisition of Alcatel-Lucent.
It is thought that well over 2,000 Nokia staffers are set to receive their marching orders between now and the end of 2018, mostly in Finland and Germany. However, Nokia said it was conducting meetings with both of its European Works Councils and consulting with employee representatives in 30 other markets as well.
“These actions are designed to ensure that Nokia remains a strong industry leader,” said Nokia CEO Rajeev Suri.
“When we announced the acquisition of Alcatel-Lucent we made a commitment to deliver €900m in synergies – and that commitment has not changed.
“We also know that our actions will have real human consequences and, given this, we will proceed in a way that that is consistent with our company values and provide transition and other support to the affected employees.”
A Finnish government spokesman described the cuts as “regrettable” and urged Nokia to bear social responsibility, while union representatives told Reuters that Finnish workers had lost out to the French.
The cuts will come in areas where there is overlapping function between both the Nokia and the Alcatel-Lucent organisations, such as research and development (R&D), regional sales organisations and some corporate functions.
The supplier added that, at the same time, it was having to take steps to adapt to market conditions that remained challenging, and shift more resources into future-looking technologies such as 5G mobile networking and the internet of things.
In light of this, it will also continue to target savings in real estate, services, procurement, manufacturing and its supply chain organisation.
Nokia took full control over the Franco-American Alcatel-Lucent business in January 2016 when it acquired the bulk of its rival’s securities.
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This followed a year-long acquisition process intended to create a leader in mobile and fixed networking, IP and optical technology, and applications and analytics.
The combined company is expected to produce revenues of around €25bn per annum. It will be second only to Sweden’s Ericsson in the supply of carrier-grade telecoms networking equipment, and will move into the lead in long term evolution (LTE) and fixed broadband.
It also gains further clout in areas such as IP routing, small cells and software-defined networking (SDN), and a route into the US through Lucent.