PARIS (Reuters) – Finland’s Nokia Oyj plans to cut 1,233 jobs at its French subsidiary Alcatel-Lucent International, equivalent to a third of the local workforce, the group said on Monday, confirming an earlier Reuters report.
The logo of Nokia is seen before the company’s news conference in Espoo, Finland March 2, 2020. Lehtikuva/Markku Ulander via REUTERS THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. FINLAND OUT. NO COMMERCIAL OR EDITORIAL SALES IN FINLAND
Nokia, which competes with Ericsson and Huawei [HWT.UL] for work on lucrative 5G networks, said in a statement the staff reduction was needed because of “very important” pressures on costs in the market.
The announcement is likely to have political repercussions in France, as Nokia bought the parent company of Alcatel-Lucent International five years ago on the condition it would keep jobs and expand its research and development teams in the country.
Nokia became totally free of such commitments this month, a spokeswoman said.
The job cuts will particularly affect R&D functions, the company said.
“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,” said Thierry Boisnon, president of Nokia in France.
Nokia employs 5,138 people in France, out of whom 3,640 work for Alcatel-Lucent International.
The entity was part of Alcatel-Lucent group before its acquisition by Nokia in 2015 in an all-share deal that valued the French business at 15.6 billion euros ($17.5 billion).
The merger was closely scrutinized by the French government and its economy minister at the time, Emmanuel Macron, who is now president.
“It’s just a low cost strategy that is being implemented, contrary to all the commitments made by Nokia in France. Nokia is laughing at everyone, first and foremost the French government,” the CFE-CGC union at Nokia said on its website
At the time of the deal, Nokia committed to preserve jobs in France for two years and expand research and development teams in the country to make it a key resource within the group for the next generation of mobile internet technology, or 5G.
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Reporting by Mathieu Rosemain and Gwenalle Barzic; editing by Richard Lough and Mark Potter