In its bid to cut costs and restructure its business, Nokia has officially confirmed laying off 1,300 employees in its home market of Finland. According to a statement by the company, the layoffs will take place over summer this year and will be carried out across all business departments, support functions, and locations, excluding technologies.
Nearly half of these layoffs will be at the company headquarters in Espoo whereas Oulu and Tampere will witness 25% of layoffs each.
“The majority of the reductions will be pursued during the summer, and a smaller proportion by the end of the year,”
said Nokia in a statement which was rather discreetly released only in Finnish language.
The statement incidentally comes after the recent announcement of its come back in feature phone business.
However, the layoffs in Finland may just be a beginning of a much wider scale of layoffs the Finnish giant is said to be planning. According to a report in Bloomberg last month, the company might be planning to reduce as much as 14% of its global workforce.
Citing unnamed people familiar with the matter, the report had claimed that Nokia was set to eliminate 10,000-15,000 employees out of its total workforce of 1,04,000 with about 1,300 cuts in Finland. And now it turns out the report had accurately predicted the fate of employees in Finland at least.
In addition to Finland, the report also said that German workforce could also be reduced by the company laying off 1,400 employees out of 4,800 German employees.
These wide layoffs are a part of company’s strategy to cut costs after its big acquisition of its French rival Alcatel-Lucent. The deal which was over $16.6 billion is expected to close in the first half of this year and the company has been planning these layoffs in order to meet the expenses.
France is also expected to witness layoffs by Nokia but it has a deal with the French government to keep 4,200 jobs in the country for two years after the Alcatel-Lucent deal. As a result of this, it will shed only 400 employees in France and will also hire 500 new ones for its research and development units in the country.
Last year post the announcement of acquisition, CEO Rajiv Suri had set a goal of lowering the operating costs of the company by €900 million (about $1.02 billion) by the year 2018.
The company has not made any official announcement about these global layoffs yet, but after Finland, we may witness more of these in coming months.
In the meanwhile, in addition to cutting costs, Nokia also seems to be focussing on new business areas such as Internet of things (IoT) and digital healthcare. The company recently announced setting a $350 million fund aimed specifically at the IoT segment.
Last month, towards the same goal, the company acquired another French company called Withings for $192 million. Withings is a maker of digitally connected modern healthcare gadgets through which Nokia aims to expand the portfolio of its products coming from Nokia Technologies.