Nokia recently acquired Alcatel-Lucent to create what it terms as an “Innovation Leader”. Nokia had paid EUR 15.6 billion through a public exchange offer in France and in the United States for acquiring it. As a result of this acquisition, Nokia has 104 000 employees now. But after the acquisition phase comes the bitter phase of headcount reduction or job cuts which are given in any acquisitions. Nokia has today launched headcount reductions as part of global synergy and transformation program. Nokia is planning to save EUR 900 million in full year 2018 related to the acquisition of Alcatel-Lucent.
Here is the full press-release.
Nokia launches headcount reductions as part of global synergy and transformation program
Espoo, Finland – Nokia announced today that it is beginning actions to reduce company personnel globally as part of its synergy and transformation program. As previously announced, Nokia is targeting EUR 900 million of operating cost synergies to be achieved in full year 2018 related to the acquisition of Alcatel-Lucent. At the same time, Nokia is taking steps to adapt to challenging market conditions and to shift resources to future-oriented technologies such as 5G, the Cloud and the Internet of Things. As part of the program, the company also continues to target worldwide savings in real estate, services, procurement, supply chain and manufacturing.
The headcount reductions are expected to take place between now and the end of 2018, consistent with the company’s synergy target timeline. Reductions will come largely in areas where there are overlaps, such as research and development, regional and sales organizations as well as corporate functions. Nokia outlined these areas on October 29, 2015, when updating its synergy target.
To start the process, Nokia representatives are meeting today with the company’s two European Works Councils. Similar meetings and consultations with employee representatives are taking place in almost 30 countries in the coming weeks. Processes and timelines will vary from one country to another.
“These actions are designed to ensure that Nokia remains a strong industry leader,” said Nokia President and CEO Rajeev Suri. “When we announced the acquisition of Alcatel-Lucent we made a commitment to deliver EUR 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 that is consistent with our company values and provide transition and other support to the impacted employees.”
Nokia plans to report on the implementation of the synergy and transformation program in connection with its quarterly earnings releases.