Nokia Job Cuts in France on Hold Report
Nokia's plans to cut about 600 jobs in France are on hold after French government officials requested a meeting with the Finnish vendor on October 2, according to a story from Reuters.
Benjamin Griveaux, the French junior economy minister, told reporters that he would meet with unions and senior executives representing Nokia Corp. (NYSE: NOK) on October 2 to make sure the company was fulfilling earlier promises to boost research and development jobs in France.
The news comes after Nokia was reported earlier this month to have said it would cut about 600 jobs in France as part of a drive to save around 1.2 billion ($1.4 billion) by the end of 2018. (See Eurobites: ADVA Lands South African Fiber Rollout Deal.)
The cuts represent about 0.6% of Nokia's global workforce and will affect employees at either Nokia Solutions Networks France or what used to be Alcatel-Lucent, the Paris-headquartered vendor it acquired in a 15.6 billion ($18.7 billion, at today's exchange rate) deal last year.
As Reuters reports, during his tenure as economy minister, French President Emmanuel Macron extracted a promise from Nokia that it would hire another 500 R&D professionals in France if it was allowed to buy Alcatel-Lucent.
Like Swedish rival Ericsson AB (Nasdaq: ERIC), Nokia has recently suffered dwindling sales amid a downturn in the market for network equipment. (See Nokia Shames Ericsson on Profits but Sees Trouble Ahead.)
Revenues at its networks business, which accounts for 88% of the total, shrank 5% in the recent April-to-June quarter, to about 4.97 billion ($5.95 billion), compared with the year-earlier period.
The company appears to have fared better than Ericsson, however, and is currently eyeing an expansion into enterprise markets where it believes the growth prospects are much better than in its mainstream telco business.
Both companies have faced tough competition from Chinese equipment giant Huawei Technologies Co. Ltd. , although even that company has recently complained about worsening conditions in the service provider market. (See Huawei Slowdown Casts Pall Over Network Sector.)
Nokia's share price closed down 0.48% in Helsinki today.
Iain Morris, News Editor, Light Reading