Nokia Announces Layoffs, Likely To Cut Over 2,000 Jobs In China & Europe As Part Of Cost-Cutting Strategy

Finland-based tech giant Nokia has announced a major wave of job cuts, marking a step in its ongoing cost-cutting strategy. According to a report by Reuters, the company plans to eliminate nearly 2,000 positions in Greater China, alongside an additional 350 jobs in Europe. These layoffs come as part of a broader effort to streamline operations and reduce costs, with the goal of saving up to 1.2 billion euros by 2026.

The company had previously outlined these plans in 2023 when it first revealed its intentions to cut up to 14,000 jobs globally. The layoffs in Europe have been confirmed by a Nokia spokesperson, though no official comment was made regarding the job cuts in China.

Nokia's annual report provides some context for the scale of these job cuts. The company employed around 10,400 people in Greater China, while its European workforce stood at approximately 37,400. Cutting 2,000 jobs in China will significantly reduce Nokia's presence in a region that was once one of its key markets.

China's relationship with Nokia has changed drastically in recent years. In 2019, China accounted for 27% of Nokia's net sales. However, as the US imposed bans on Chinese telecom giants like Huawei and ZTE, Chinese companies started reducing contracts with international firms like Nokia and Ericsson. By the most recent quarter, Nokia's sales from China had plummeted to just 6%.

Despite these challenges, Nokia has shown resilience. The company's recent financial reports revealed a 9% increase in operating profit for the third quarter, largely due to its cost-cutting measures. However, this was offset by a shortfall in net sales, signalling the need for continued efforts to boost profitability.

Nokia is not alone in its decision to trim its workforce amid challenging market conditions. Earlier this week, Meta, the parent company of Facebook, announced layoffs across various teams, including WhatsApp, Instagram, and Threads divisions. While Meta has not disclosed the exact number of affected employees, the move reflects a broader trend in the tech industry.

As Nokia continues its restructuring, it remains to be seen how these job cuts will affect its overall performance. While the company's cost-cutting initiatives have yielded some positive results in terms of profit, the reduction in its Chinese market presence and overall workforce could present new challenges.