Nokia to axe 10,000 employees over two years for investing in research
morningsidemaryland Desk : A highly renowned and esteemed company Nokia is planning to revamp itself by axing 10,000 jobs. The reason given by the company is that it is going to invest towards more of research capacities as per their strategy and plan.
The company is going to take two years to cut the jobs.
The restructuring phase is attributed to the change in Chief Executive Officer namely Pekka Lundmark who is constantly devising as well as suggesting ways for creating a much needed transformation of the company so that it is able to compete with Nordic rival Ericsson.
In October, last year, as per the strategy, he has devised to create four business groups and it is equally determined and hopeful that the company will be making all the efforts in its capacity to take a lead in 5G.
In a detailed meeting, Lundmark has a far sighted vision and plan to take the company to heights where he has series of action plans along with allocation sufficient financial budget to lead the company. This will naturally aid the company to bring more business.
As per the financial requirement, it is expected that the company require roughly EUR 600 million to EUR 700 million which will be going towards restructuring along with other expenses arising out of by 2023.
He is hopeful of giving the best of assistance to the employees with regards to any potential impact which they may face due to the same. He is prioritizing the fact that those who are potentially going to be affected, are accordingly supported as well.
It is estimated by Nokia that restructuring is going to significantly minimize the cost base by roughly EUR 600 million by end of 2023. This is going to be quite a noteworthy feature. Hence, based on the savings which will be there, it will be involved towards other productive and constructive works such as allocation towards research and development along with future capabilities such as the times associated with salary inflation etc.
There has been a forecast by Nokia for February where it expected that the revenue will fall between EUR 20.6 billion and EUR 21.8 billion from EUR 21.9 billion in 2020. This is obviously quite a concerning figure and it is also one of the reasons for Nokia to take adequate steps along with.
Although, Ericsson and Nokia are continuously rising to the charts of popularity by gaining increasing number of telecom operators as currently, they are switching over to 5G networks. It seems that the Swedish company did have an edge owing to the fact that it has won 5G radio contracts in China.
However, on the other hand Nokia isn’t in a phase where it has won any 5G radio contract in China. If that was not enough, it has equally lost to Samsung Electronics where it was supposed to supply 5G equipments to Verizon. Well, there seems to be a promising phase for the company in the near future for sure.