Nokia Corp. (NYSE:NOK) is cutting 10,000 jobs as it realigns its business to gain market share in the 5G wireless internet space.
The job cuts will save Nokia $715 million U.S., the Finnish telecommunications equipment maker said in a written statement. The decision to reduce its workforce by 10% follows an annual report that left investors disappointed by the prospect of a continued slide in the company’s revenue.
The move is part of a strategy unveiled last October to create a new operating model that Nokia hopes will help it cope better with the competitive market for 5G wireless internet. Rival Ericsson has managed to build 5G networks faster than Nokia and reaching profitability targets ahead of schedule.
Nokia shares were up a slight 0.7% in pre-market trading Wednesday on news of the job cuts. The stock is up about 15% this year after falling 4.4% in 2020.
Nokia, once the dominant maker of mobile phones and Europe’s most valuable company, is a shadow of its former self after Apple’s (NASDAQ:AAPL) iPhone and Samsung pushed it out of the handset business a decade ago.
More recently, Nokia has lost market share in the opening salvos of the 5G wireless race and has struggled to integrate its giant Alcatel-Lucent (NYSE:ALU) purchase from 2016. That’s left it trailing behind Ericsson (NASDAQ:ERIC) and Huawei and Samsung.