Nokia, the Finland-based telecom network equipment maker, is likely to lay off 10,000 to 15,000 employees globally as part of its cost-cutting program following its acquisition of Franco-American rival Alcatel-Lucent, said a Finnish union representative.
The Finnish company began the program last month with a target to slash €900 million ($1 billion) of operating costs by 2018.
“These actions are designed to ensure that Nokia remains a strong industry leader,” explained Nokia President and Chief Executive Officer Rajeev Suri in a statement.
Nokia has already confirmed terminating 1,300 jobs in its home market of Finland according to reports. However, the company declined to give an overall figure of worldwide job cuts. Nonetheless, the telecom network said it already had talks with employee representatives in about 30 countries regarding the matter.
“We haven’t heard any official numbers, but based on the information from our union contacts, I would estimate the global impact of this round would likely be around 10, 000 to 15,000 jobs,” said Risto Lehtilathi, a trade union representative at Nokia’s Oulu base. This figure is equivalent to roughly 14 per cent of the company’s combined workforce worldwide. Lehtilathi, in addition, said he feared that Nokia would have another round of cuts in the future.
According to reports, headcount reductions would target “areas where there are overlaps,” which include research and development, regional and sales organization as well as corporate functions.
“Some work will be completely terminated, some cuts come from Alcatel overlaps, and some work will be transferred to countries with lower costs,” commented Tuula Aaltola, a Finnish shop steward.
Nokia currently employs around 104,000 people globally, with about 6,850 workers in Finland; 4,800 in Germany and 4,200 in France.
Last week, the telecom company specified its plan for its employees in Finland, saying it was cutting around 1,000 jobs, compared to an initial target of 1,300 jobs. Nokia also said it is looking to reduce 1,4000 positions in Germany and around 400 jobs in France but it would also create 500 research and development posts—in line with a pledge to the French government during the merger with Alcatel-Lucent. The company also promised the French officials it would not terminate anymore jobs in the country in the next two years.
“We don’t know what Nokia’s plan is for the US-based workforce. They have cut 500, cut our (unionized) workforce in half, and we hope that’s all that is going to be taken away,” Communication Workers of America (CWA) representative Lisa Bolton said.
The chief executive officer said in a statement, “When we announced the acquisition of Alcatel-Lucent we made a commitment to deliver €900 million in synergies—and that commitment has not changed. 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.”