Nokia, the Finland-based telecom equipment maker, has confirmed that it plans to cut around 1,233 hobs at its subsidiary Alcatel Lucent International. The number of jobs cited accounts for about one-third of the company’s workforce.
Currently, Alcatel Lucent International has about 3,640 employees. Of the total 1,233 jobs being cut, 831 jobs belong to the Nozay site, and 402 jobs belong to the Lannion site. Nokia France affiliate companies, including Radio Frequency Systems, Nokia Bell Labs France, and Alcatel Submarine Networks aren’t affected by the job cuts.
The development comes as the acquisition condition of not cutting the French jobs for at least five years is about the expire. This raises the question if Nokia intended to take this step as soon as it was allowed to or if the company is just trying to accommodate as per the market conditions.
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However, Nokia has said in a statement that staff reduction is a necessary move because of the significant cost pressures. In the month of April, Nokia had said that the company planned to cut costs by 500 million euros by the end of this year, with 350 million euros targeted to come from operating expenses and 150 million from sales costs.
Nokia acquired the France-based Alcatel Lucent for €15.6 billion to strengthen its position in the market. During the acquisition, the French government was pretty clear about saving French jobs and put up a condition that Nokia would not cut French jobs for at least five years after the acquisition, the period which is about to expire.
The company is competing against the like of Huawei and Ericsson in the telecom equipment space. The job cuts at Nokia come at a time when it is the only company among the “big five” whose R&D investments have declined over the past years but it is higher than the other four when compared to the revenue.
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(Source)
