Nokia's Alcatel-Lucent Acquisition Prompts Worlwide Job Cuts

By Staff Writer

Apr 07, 2016 09:28 AM EDT

Following Nokia's acquisition of rival Alcatel-Lucent, is the reduction of its worldwide workforce as part of the cost-cutting program. The takeover is purposed to help Nokia in the race with Sweden's Ericsson and China's Huawei where market growth is restricted and strong competition are aggravating the prices. The firm already had talks with labor unions on Wednesday about the reported job cuts.

Finland's largest company has laid off thousands of local jobs over the past years as its former dominant phone business was obscured by the rise of smartphone rivals.  The phone business was later sold to Microsoft which ceaselessly lay off jobs in the country hit by recession, MSN reported.

Nokia will trim 1,300 jobs from its Finnish bases in Espoo, Tampere and Oulu. It will cut 400 positions by 2018 in its native country and will hire 500 workers in the research and development field in accordance with promises made to the French government to keep 4,200 employees in the country for two years after the acquisition of Alcatel-Lucent. The company currently has 6,850 employees in Finland that add to its 104,000 strong worldwide workforce, based on The Wall Street Journal report.

Additional cut of 4,100 jobs will be from Germany where the company still has a huge operation from its former partnership with Siemens. The company did not disclose the total figure of jobs that would be lost. The Finnish company also mentioned that it is restructuring the group "to adapt to challenging market conditions" by switching resources to new technologies including 5G, internet of things and cloud computing, as reported by the Financial Times.

"The actions are designed to ensure that Nokia remains a strong industry leader. We know that our actions will have real human consequences and, given this, we will proceed in a way that is consistent with our company values and provide transition and other support to the impacted employees," according to Rajeev Suri, Nokia's chief executive.

The move of cutting jobs is Nokia's way of cutting operational costs and to focus on areas of overlap such as in the field of sales and corporate functions, and for the research and development. In December, Nokia shareholders agreed on the €15.6 billion acquisition of Alcatel-Lucent. On January 14, both companies began working as an operationally combined group.

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