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April 7, 2016updated 05 Sep 2016 11:30am

Nokia announces massive job cuts after Alcatel-Lucent buyout

News: The headcount reductions are part of Nokia's global synergy and transformation programme.

By CBR Staff Writer

Nokia will slash jobs as part of a €900m cost-saving plan following its €15.6bn acquisition of French rival Alcatel-Lucent.

The company did not give any details on how many employees will lose their jobs globally. Several reports suggest that Nokia plan to cut 1,300 of its 6,850 employees in Finland and 1,400 of its 4,800 headcount in Germany.

The job cuts, which are anticipated to be carried out between now and the end of 2018, are part of the company’s global synergy and transformation programme.

Reductions are planned to come in the areas where Nokia says there are overlaps, such as research and development, as well as regional and sales organisation.

Nokia is also planning to cut costs in real estate, services, procurement, supply chain and manufacturing.

The company said the restructuring is part of its plans to adapt to challenging market conditions by shifting resources to new technologies like 5G, the cloud and the Internet of Things.

Nokia president and CEO Rajeev Suri said: "These actions are designed to ensure that Nokia remains a strong industry leader.

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"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."

Last December, Nokia shareholders approved the acquisition of Alcatel-Lucent. The two companies started working together in January.

The combined company provides a complete end-to-end portfolio of products and services, with 104 000 employees and five business groups: mobile networks, fixed networks, ip/optical networks, applications & analytics and Nokia Technologies.

The combined company also has a strong financial base from which to grow and invest. On a 2014 pro forma basis, it would have had net sales of € 24.7bn and a non-IFRS operating profit of €2.3bn.

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