Nokia has been trying to make an attack in the smartphone field recently. The company has recently begun work on the gaming smartphone called Nokia G10. However, it was revealed in the company’s quarterly financial statement that business was not going well. The number of employees required to be included in the company’s quarterly financial statement has not been disclosed.
Nokia has concealed that for the past year it has reduced its total labor cost of 500 million euros ($ 597 million) annually. But the latest report released by Nokia shows that around 5,000 jobs were reduced in 2019 and more than 6,000 jobs disappeared last year.
The report shows that Nokia’s net layoffs amounted to 1 044, and Nokia’s average number of employees in 2020 fell to 92,039. This means Nokia’s total employees have dropped 11% in just two years. According to the analysis, it was reported that employment numbers fell all over the world, but in China this decrease was greater. It has been announced that the number of employees of Nokia in China has decreased by approximately 3,500 since 2018, to 13,749. In 2020, Nokia experienced a 9% decrease in the number of employees in the United States, while the company announced that it had closed more than 2,800 positions since 2018.
Nokia Did Not Official Statement on Mass Layoffs Nokia did not mention spending cuts in its quarterly financial report. Company; “Our workforce has been experiencing fluctuations in recent years as we have adjusted our strategy according to business goals and activities.” He told it with an explanation in the form.
But it’s good for investors the news would give. Despite sales dropping 6%, Nokia’s operating profit margin increased by 4% in 2020. Nokia suffered an operating loss of € 59 million ($ 70 million) two years ago. It has generated at least 885 million Euros ($ 1.1 billion) in profit by 2020. However, this did not look good for shareholders, and net losses were reported to be over € 3 billion ($ 3.6 billion), especially in the past three years.
The most worrying event for the company is that in the latest savings plan, the company’s research and development expenditures have decreased significantly. Nokia invested approximately 4.8 billion euros ($ 5.7 billion) in its R&D department in 2018. Shareholders complained about this after the company made mistakes in the 5G market. Pekka Lundmark, the company’s new CEO, has pledged to revive the smartphone business, no matter the cost. Under the leadership of Pekka Lundmark, there are indications that the company will further reduce costs. It downgraded Nokia’s inflated global leadership team from 17 to 11.
It has been reported that within the framework of the restructuring plan, the company will transfer 14,000 employees to new business groups such as mobile, network infrastructure, cloud services and licensing (Nokia technology).