Summary:
Nokia Corp. confirms its plans to cut 1,233 Jobs at French subsidiary Alcatel-Lucent as part of a wider restructuring of its research and development footprint.
Nokia Corp. confirms its plans to cut 1,233 Jobs at French subsidiary Alcatel-Lucent as part of a wider restructuring of its research and development footprint.
Amid a 2018 global cost saving effort, Nokia launched a global evaluation of its R&D operations which has already led to global staffing reductions and is now impacting its operations in France. The layoffs would equal about one-third of the workforce at French subsidiary Alcatel-Lucent International.
Nokia has 5,138 employees in France, around which 3,640 work for Alcatel-Lucent International. Nokia will cut 1233 jobs which is one-third, from the Alcatel-Lucent division in France. Of the total, 831 jobs belong to the Nozay site, and 402 jobs belong to the Lannion site. After the announcement, the CFE-CGC union delegates and the Lannion site mayor have reacted strongly against the job cuts.
The merger came with lots of risks including the jobs. Back in 2015, Nokia announced that it would acquire Alcatel-Lucent for €15.6 billion to strengthen its position against its rivals. During the merger, the French government clearly stated that protecting research jobs in the country must be the topmost priority.
Nokia had to cut its head strength in other countries, including Finland and Germany. Even in 2019, Nokia was planning to cut some jobs in France, but they had to postpone it after seeing a huge backlash from the French government and the unions.
The company said in a statement, "The project, which Nokia presented to the European and French Works councils (ALU-I) today, is expected to lead to an estimated reduction of roughly 1,233 positions across R&D and central functions at Nokia`s Paris-Saclay and Lannion sites,"
"The aim is to achieve a best-in-class operating model globally, increase R&D productivity and agility to strengthen the company`s competitive position and secure long-term performance," company adds.
Nokia was forced to cut earnings guidance last October, after it appeared to fall behind rivals Huawei and Ericsson in the market for new 5G mobile network equipment. Its operating margin target was cut to just 9.5% for the 2020 fiscal year from a previous forecast of 12-16%.
Earlier to that, Nokia had been aiming to cut annual costs by €700 million ($785 million) between 2018 and 2020, but this target was also revised down, to around €500 million ($561 million), due to the need to invest more in the struggling 5G business.
Though in its statement, Nokia said that, “the cuts would not affect employees working for other French affiliates, including Radio Frequency Systems (RFS), Nokia Bell Labs France (NBLF) and Alcatel Submarine Networks (ASN).”
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