MUMBAI/NEW DELHI: Nokia’s global rightsizing initiatives could affect between 1,000 and 1,500 employees in India over the next couple of years, with the Finnish company struggling locally because of the Rs 1,000 crore-plus stuck payments at Bharat Sanchar Nigam Limited (BSNL), financial challenges at Vodafone Idea, and delays in 5G rollouts.
People familiar with the matter said that functions such as global delivery centers and customer experience segments, including sales functions, could account for the majority of the jobs shed in India.
“The employees are concerned and various town halls are expected to take place later this month for various businesses…We are hoping to get clarity on our business and roles during these town halls,” said a Nokia executive.
Nokia employs some 15,000 people in India. It has two centers – in Chennai and Noida – for global service delivery, a manufacturing unit in Chennai, and its research and development center in Bengaluru. Sources said that the vendor’s India R&D center is unlikely to see a major impact since global R&D will continue to see investments.
“The India operations are definitely going to feel the pressure and typically the ratio may be similar to what is seen globally, which is about 10-11% of its workforce,” said an industry executive.
“These plans are global and likely to affect most countries. It is too early to comment in detail, but we expect the consultation processes to start shortly, where applicable. Business groups are looking to reduce site fragmentation, but we have no further details at this point,” a Nokia India spokesperson said in a statement to ET.
“While Nokia won business from Bharti Airtel, its business with Vodafone Idea didn’t grow due to the telco’s financial condition and integration efforts. BSNL is one of the major pain points for Nokia India. They met the DoT secretary again to escalate the issue, and also wrote to the PMO,” a second person said.
Nokia had 20,511 employees in the Asia Pacific region, of which 15,000 employees were based in India in 2020. The company’s net sales in India fell from 1,348 million euros to 944 million euros in 2020. It had reported 1,629 million euros in net sales in 2018 in India.Nokia recently said that it plans to cut over 10,000 jobs worldwide from a present strength of 90,000.
“These plans are global and likely to affect most countries,” a Nokia spokesperson told global media earlier this week
In its annual report released on March 4, Nokia said it may be adversely affected by developments with respect to customer financing or extended payment terms that it provides to its customers. It particularly mentioned India where risk factors are high.
“While defaults under financings, guarantees, and trade credits to our customers resulting in impairment charges and credit losses have not been significant for us in the past, these may increase in the future, in particular in markets such as India, with increased risks potentially affecting our customers,” it added.