Nokia announced it is consulting with its two European works councils over staff cuts that form part of its commitment to reduce operating costs by €900 million ($1.02 billion) by 2018 following its acquisition of Alcatel-Lucent.
The talks with European workers representatives are the initial stage of broader consultations with all staff globally, Nokia stated. In the coming weeks, the Finland-based vendor will hold similar talks with employee representatives in almost 30 countries to discuss a headcount reduction programme that will run from now through to the end of 2018.
Nokia president and CEO Rajeev Suri said the job cuts are necessary to ensure the company "remains a strong industry leader," and are in-line with previously announced plans to reduce operating costs by leveraging synergies with Alcatel-Lucent.
"We also know that our actions will have real human consequences and, given this, we will proceed in a way that…is consistent with our company values and provide transition and other support to the impacted employees," Suri said.
Nokia in October announced that it had accelerated its plan to deliver the €900 million in cost savings by a year. While it originally aimed to deliver the savings by 2019, the faster than expected closing of the Alcatel-Lucent acquisition saw Nokia cut the time to within the full year 2018.
Although the vendor has not said how many staff will be affected by its headcount reduction programme, Reuters reported that around 1,300 staff in Finland would be affected. On a global basis, the move will see as many as 15,000 staff go, Bloomberg reported.
In its October statement, Nokia said it would seek to cut costs by streamlining overlapping products and services -- in particular in the mobile networks business -- rationalising regional and sales organisations, rationalisation of overheads -- in manufacturing, supply chain, real estate, and IT -- reducing central function and public company costs, and leveraging the combined company's expanded purchasing power to deliver procurement efficiencies.
Nokia said a synergy and transformation programme includes steps to improve its ability to match demand for future-oriented technologies including 5G, the cloud, and Internet of Things.
For more:
- see this Nokia announcement
- view the company's October statement
- read this Reuters report
- see this Bloomberg article
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