Czech Republic: Nokia will cut 10,000 jobs

Finnish telecommunications equipment maker Nokia plans to cut up to 10,000 jobs in the next two years to reduce costs. The company also said on Tuesday that it wants to invest more in research. The decision is part of a strategy presented by CEO Pekka Lundmark last October. Nokia currently has around 90,000 employees.

The goal of the new strategy is to transform the company so that it is better able to compete with its Scandinavian rival, the Swedish company Ericsson.

Reducing the total number of employees should reduce the company's costs by 600 to 700 million euros (15.7 to 18.3 billion CZK) by 2023. At the same time, Nokia wants to invest more in research and development of fifth-generation (5G) networks, digital infrastructure and cloud services.

Job losses are set to take place during the boom in Nokia's 5G technology. However, the company lags far behind its competitors such as Ericsson because its services are too expensive. It therefore wants to focus on reducing costs and at the same time investing more in the further development of 5G networks. In addition, he wants to strengthen in the segments of digital infrastructure and cloud services, commented Štěpán Křeček, Chief Economist at BH Securities, on Nokia's steps.

According to him, however, the company still has a strong role in Europe. Nokia is gradually losing its influence in North America, but still maintains an important role in Europe. The company recently signed an agreement to become the main supplier of new technologies for the multinational telecommunications company BT Group. This includes the largest mobile network in Great Britain called EE.

In February, Nokia predicted that its sales this year would fall to 20.6 to 21.8 billion euros from last year's 21.9 billion euros. Nokia and Ericsson are succeeding in gaining new customers as telecommunications operators expand with 5G networks, Reuters reported. However, the Swedish company has an advantage because it has managed to win contracts in China.