Nokia is to reduce the workforce at Alcatel-Lucent by a third as it continues to count the cost of competing in 5G equipment market.
The Finnish mobile giant acquired its French rival for around £14.1 billion back in 2015 in a move that it was hoped would create a European networking giant capable of challenging Ericsson and Huawei.
The EU gave its blessing on the basis that the merger would not distort competition in the market. However, in order to gain French government support, Nokia promised to safeguard certain jobs for two years and make the Alcatel-Lucent division a focus of its 5G research division.
- Nokia pitches itself as one-stop shop
- What is 5G? Everything you need to know
- 6G: Where will be in 2030?
Nokia Alcatel-Lucent jobs
However the high cost of developing 5G technology and intense competition in the sector has resulted in Nokia cutting its financial outlooks and pausing dividends in recent times. Earlier this year, CEO Rajeev Suri confirmed he would step down on 1 September amid reports that the company was preparing to defend itself against any hostile takeover attempt.
The redundancies are part of cost-saving measures design to ease the transition to the 5G era and support Nokia’s ambitions of becoming an ‘end-to-end’ provider of next generation networking equipment. In the UK, Nokia is a key supplier for O2’s 5G network.
Nokia employs more than 5,000 staff in France of which more than two thirds work at Alcatel-Lucent. It is understood that 1,233 jobs are set to be slashed, with R&D teams particularly affected.
“Nokia will continue to be a major employer in France with a strong foothold in R&D, sales and services, which will enable us to develop and execute our customers’ projects efficiently,” said Thierry Boisnon, president of Nokia France is quoted as saying.
- Here are the best mobile phone deals for June 2020