#Nokia plans to cut 597 jobs in France by end 2019; Unions strongly against *Updated*

With the acquisition of anglo-franco company Alcatel-Lucent, Nokia literally doubled its workforce and announced a €1.2 billion cost savings plan. A part of the plan, are of course layoffs. The Franch government and the unions played a strong role in negotiating the sales of Alcatel, and till today, not one Franch worker lost its position, as far as I know, but that could relatively soon change.

Nokia announced that it could cut 597 jobs in France by the end of 2019. No R&D will be affected, and, at the moment, Nokia employees 4,200 people in France. It’s interesting that the date of the layoffs is announced practically 2 years in advance. Nokia knows that before job cuts in France, they have to face tough negotiations with Franch CFDT, CFE-CGC, CGT, and CFTC unions.

Nokia is also eyeing to sell the Alcatel-Lucent Submarine Networks division it owns, for an alleged price of €800 million. The process of selling this unit is complicated, because the ASN is a strategic company in France.

Source: Reuters 


Update: After a huge backlash from the unions and government, Nokia decided to postpone the decision until an agreement could be made with the involved parties. The next meeting is scheduled for October 2nd. More details here.

 

  • Stinger

    Damn. That’s a really tough situation. Difficulty on all sides.

  • Michael

    Update: https://www.nokia.com/en_int/news/releases/2017/09/22/nokia-reaffirms-commitments-made-to-the-french-government-following-the-acquisition-of-alcatel-lucent?utm_source=twitter.com&utm_medium=social&utm_content=dlvr.it

    Looks like everyone is taking a breather until October 2.

    Here is what I don’t understand:

    “In line with the commitments made, Nokia is deploying a recruitment
    program of 500 R&D engineers to be finalized by the end of 2018. In
    order to meet this target within the desired timeframe, Nokia has set up
    a program to accelerate these recruitments. To date, more than 190
    engineers have already been recruited on the Lannion and Paris-Saclay
    sites to join the R&D and Nokia Bell Labs teams.”

    “This transformation program could lead to a reduction of 597 positions
    in all central functions and Networks’ support functions. Its
    implementation would be phased in in 2018 and 2019. Research and
    development functions are not covered by the program and will continue
    to be strengthened.”

    So. Overall, is it really 97 positions being lost or are they eliminating 1097. That second quoted paragraph doesn’t make that clear. In other words are they hiring 500 R&D engineers but letting go 597 people (loss of 97 overall) or are they letting go 1097 people but hiring 500 R&D Engineers (loss of 597 overall). I’m guessing the latter?

    What do you guys reckon the average yearly salary is for the folks they are wanting to let go. I don’t know what other additional costs there are to a salary (in the US there is quite a bit extra), but lets say the average salary accounting for all additional company costs is 120k EU and it is the latter letting go of 1097 people. That’s 131 Million EU. Lets say the new 500 Engineers are averaged at 90k so that is 45 Million EU for a total cost savings of 86 Million EU per year. My WAG (Wild Ass Guess) could be really low or too high.

    Noone like to see people getting let go, but this was a merger and there will be some pain on the way to being profitable and that’s the point. Being competitive and profitable.

    Wonder how this affects Suri’s 1.2 Billion in cost synergies by end of FY 2018.

    • As I understand, it’s net 97 people losing jobs. They said no R&D positions are in danger, and that they are recruiting 500 R&D engineers. I think the earnings estimate you made could be right. Wouldn’t go so far (at the moment) to estimate the effect on Suri’s cost savings plan, because there are still negotiating and if they cannot cut in France, reductions will be made in other countries.