It can sometimes be a little difficult to keep up with the state of Nokia the company, after its phone division was sold to Microsoft, and then sold on again, and then Nokia bought another phone firm from somewhere else. The overall story, however, is not hard to keep track of — Nokia is not the company it once was, and that makes the current rumor that it could let go as many as 15,000 of its employees all the more worrying.
Although unconfirmed at this time, Nokia did previously announce plans to shed 2,400 of its Finnish and German workers in an effort to cut costs. So it could be that the expanded 10-15,000 figure that Reuters and others are quoting reflects a decision by the phone maker to pursue a round of a global fat trimming.
Even for a company of Nokia’s size, with its near 115,000 worldwide employees, a job cut of this size would have a significant impact on its ability to operate as it has before, and is likely only possible because of the recent acquisition of Franco-American rival, Alcatel-Lucent.
With several overlaps in positions across the two companies, it seems likely that eliminating redundancy would be a key factor in any large-scale layoffs that may be planned.
Not all of these redundancies are because of the acquisition, though. Another factor would be Nokia looking to cut costs by moving some of its positions to new, cheaper territories. It has not been announced which territories those might be, but speculation would suggest that they will not be within Europe.
These moves come at an important time in Nokia’s life cycle. It is still an enormous and successful company, having generated nearly $1.7 billion in profit throughout 2015. It will be looking to continue that upward trend in the years to come, but the markets it operates in are changing and it will need to remain flexible and find new avenues of revenue to make that a reality.
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