Layoffs Continue At Nokia As Part Of $1.3B Effort To Cut Costs

Nokia Friday confirmed plans to cut 170 positions in Finland, part of a major cost-savings plan stemming from its $16.6 billion blockbuster acquisition of Alcatel-Lucent in 2015.

The Finish telecommunications equipment maker cut 960 jobs in Finland last year and said it would lay off an additional 1,400 employees in Germany.

Last year, Nokia said it planned to cut thousands of jobs worldwide as part of a $1.3 billion global cost-savings plan following the Alcatel-Lucent acquisition. The company could eliminate up to 15,000 positions out of a combined Nokia and Alcatel-Lucent staff of around 101,000 -- more than 14 percent of its global workforce.

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Nokia is attempting to reduce approximately $1 billion in operating costs by 2018, while also looking at savings in the areas of manufacturing, real estate, services, procurement and supply chain.

"Nokia is going up against some pretty heavy players like Huawei and Ericsson overseas," said Todd Carothers, executive vice president of sales and marketing at CounterPath, a Vancouver, B.C.-based Alcatel-Lucent partner. "It's a tough market right now."

"I don't think this is a bad strategy by Nokia," he said. "I like the moves they've been making this year like [the] Comptel [acquisition] and focusing more around 5G at a time when carriers are looking to upgrade infrastructure."

In February, Nokia unveiled plans to acquire telecom software specialist Comptel for $370 million. The acquisition was part of Nokia's strategy to build a stand-alone software business by expanding and strengthening its software portfolio and go-to-market capabilities with additional sales capacity and a strategic partner network.

Nokia did not respond for comment by press time regarding how many more layoffs are expected in 2017.

The layoffs and reductions are expected to come in the areas where Nokia said there are overlaps, such as research and development, as well as regional and sales organizations.

"These actions are designed to ensure that Nokia remains a strong industry leader," said Rajeev Suri, Nokia's president and CEO, last year in regard to the layoffs. "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."