Nokia will cut its workforce over the next two years as part of its business efficiency. This is because Nokia plans to invest its money in the development of the 5G network.
The Finnish telecommunications group will cut between 5,000 and 10,000 jobs, or 11% of its workforce, over the next 18 to 24 months.
“This is expected to reduce the company’s cost base by around 600 million euros (US $ 715.7 million) by the end of 2023. These savings will offset increased investment in (research and development), capabilities and future costs related to salary inflation,” said the representative. Nokia in its press release quoted from CNN Business, Wednesday (17/3/2021).
A company spokesperson said that it plans to continue recruiting new workforce with capabilities in 5G.
“In Finland, we have hired more people than we have reduced over the past two years, and we expect the impact of the planned changes announced today to be a net positive,” the spokesman said.
To Compete with Competitors, Nokia Upgrades 5G Networks
Nokia is increasing investment in 5G networks after lagging behind competitors Huawei and Ericsson (ERIC). On Monday, the company announced partnerships with Amazon (AMZN) Web Services and Google (GOOG) Cloud to develop new applications for the technology.
Nokia is also working with Microsoft (MSFT) to build cloud solutions for businesses and announced a partnership with NASA last October that seeks to put 4G networks on the moon.
“In areas where we choose to compete, we will play to win. Therefore, we improve product quality and cost competitiveness, and invest in the right skills and capabilities,” said Pekka CEO Lundmark in a statement.
Nokia could benefit from last year’s UK decision to ban Huawei from its 5G telecommunications network. Following the move, the company said it had the capacity to replace all Huawei equipment on the UK network.
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