Nokia has announced plans for more job cuts, largely in Finland, as business reality hits virtual reality camera sales.
The axe will fall on its advanced technology and licensing division, Nokia Technologies, where up to 310 jobs are on the line. Up to 190 of these will be in Finland, with the rest in the UK and US.
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Nokia cites Nokia Technologies’ “increased focus on digital health and brand and technology licensing” as the reason behind the move. The company already boosted its digital healthcare capabilities last year, when it acquired French health tech firm Withings.
“Nokia Technologies is at a point where, with the right focus and investments, we can meaningfully grow our footprint in the digital health market, and we must seize that opportunity,” said Gregory Lee, president of Nokia Technologies.
“While necessary, the changes will also affect our employees, and as a responsible company we are committed to providing the needed support to those affected.”
The changes also include cutting down Nokia’s virtual reality (VR) investments after “slower than expected” development of the market. The company is dropping further versions of its 360-degree VR camera OZO, only two years after the device was unveiled with a hefty price tag of $60,000 (£45,500). The company said commitments to existing customers would be kept.
Nokia Technologies is also responsible for Nokia’s patent licensing business, which the company said will be left untouched. Altogether, the division employs approximately 1,090 people, while Nokia itself employs 101,000 staff globally.
The latest round of layoffs follow a string of similar announcements in Finland. In June 2017, Nokia confirmed 170 job cuts in its networks division, and a year earlier announced the reduction of 1,032 jobs across its total Finnish workforce.
These redundancies are part of Nokia’s global cost-cutting and transformation programme following its majority stake in French telecoms firm Alcatel-Lucent in early 2016.
Samu Salo, chairman of the Union of Professional Engineers in Finland, expressed his sadness and surprise at the latest news, especially its timing.
“This is the second year of Nokia’s three-year transformation programme, and it would be naive to believe these are the last of the reductions globally,” said Salo.
“As the union leader for Finnish engineering expertise, I hope [Nokia’s] business decision makers understand how good and profitable a workforce they have at their disposal in Finland. I hope this will be the last of the reductions in Finland.”
Currently, Nokia employs circa 6,100 people in its home country. In the company’s heyday during the early 2000s, the number was over 24,000.
But Nokia isn’t the only telecoms company trimming costs in Finland. Earlier this week, Swedish rival Ericsson announced plans to reduce its Finnish workforce by up to 80 people. The news is tied to strategic restructuring and cost saving efforts the company published in March 2017, which aims to save 10bn Swedish kronor (£940m) by mid-2018.
Ericsson said its talks with Finnish unions will begin on 12 October, and it aims to redeploy the employees at risk of redundancy. The company currently has roughly 800 employees in Finland.