Finnish kit vendor Nokia is going to cut 1,233 jobs at its Alcatel-Lucent subsidiary in France as part of its continued search for profitability.
The story was first reported by Reuters, which notes that a five-year commitment not to cut French jobs, which was a condition of the acquisition being approved, is about to expire. So this is presumably not a coincidence, but it’s not clear whether Nokia always intended to have a purge as soon as it was allowed, or if this move is a response to more immediate concerns.
The report makes reference to market pressures on costs as a reason for the redundancies, which is ironically a somewhat redundant statement. Why else would a company get rid of a bunch of people? Again, they could be exceptional short-term pressures, or Nokia could have always considered those (largely R&D) positions redundant, but was forced to maintain them for five years by the French government.
“Nokia will continue to be a major employer in France with a strong foothold in R&D, sales and services, which will enable us to develop and execute our customers’ projects efficiently,” Thierry Boisnon, President of Nokia in France, is quoted as saying. We had yet to hear back from Nokia ourselves at time of writing.
Nokia’s share price was down a percent or two at time of writing. Investors often reward companies that announce redundancies due to the presumed increase in profitability that comes with it. In this case, however, such sentiment may well have been offset by speculation about what this means for the health of the company on the whole. Nokia could have done more to manage the message by issuing a press release and its strange that it chose not to publicly address such a major bit of news until apparently forced to by the media.