Finnish kit vendor Nokia is going to cut 1,233 jobs at its Alcatel-Lucent subsidiary in France as part of its continued search for profitability.
The story was first reported by Reuters, which notes that a five-year commitment not to cut French jobs, which was a condition of the acquisition being approved, is about to expire. So this is presumably not a coincidence, but it’s not clear whether Nokia always intended to have a purge as soon as it was allowed, or if this move is a response to more immediate concerns.
The report makes reference to market pressures on costs as a reason for the redundancies, which is ironically a somewhat redundant statement. Why else would a company get rid of a bunch of people? Again, they could be exceptional short-term pressures, or Nokia could have always considered those (largely R&D) positions redundant, but was forced to maintain them for five years aby the French government.
We received the following statement from a Nokia spokesperson “With a focus on cost continuing to be essential with the industry, Nokia has announced a project to streamline its activities in France, as part of a global program. 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.
“Following the global cost savings program announcement on October 25, 2018, Nokia is reinforcing its efforts and has earlier launched a global evaluation of its R&D operations that has led to significant adjustments globally. Implementation already started in some countries and the project is now impacting Nokia’s operations in France.
“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 three Nokia France affiliate companies – Radio Frequency Systems (RFS), Nokia Bell Labs France (NBLF) and Alcatel Submarine Networks (ASN) – are not in the scope of the announced project.
“The planned project is subject to consultations with the Works Council / employee representatives and the final outcome will be known only after the process has been concluded.
“Nokia is fully committed to supporting the impacted employees during the process. We will do our best to make sure that those affected are treated fairly and respectfully, and that they fully understand the options and support available to them. We intend to introduce support programs to help employees transition to new positions or careers as much as possible.”
Nokia’s share price was down a percent or two at time of writing. Investors often reward companies that announce redundancies due to the presumed increase in profitability that comes with it. In this case, however, such sentiment may well have been offset by speculation about what this means for the health of the company on the whole. Nokia could have done more to manage the message by issuing a press release and its strange that it chose not to publicly address such a major bit of news until apparently forced to by the media.