Last week’s events brought a series of strategic announcements from Nokia that alarmed both European employees and market analysts. The telecom giant revealed significant European staff reductions while unveiling a major investment in the US. These moves coincide with European political efforts to bolster digital sovereignty and reduce dependency on American technology firms.
In Germany and France, Nokia informed hundreds of R&D employees of impending layoffs. The European operations affected are crucial, including those involved with intellectual property and standard-setting organizations like ETSI and 3GPP. This reduction in staff raises concerns, especially in light of European calls for technology self-reliance.
Conversely, the same week saw Nokia announce a $4 billion investment in US R&D and manufacturing, touted as part of an “AI supercycle.” The restructuring involves consolidating five business units into two: Mobile Infrastructure and Network Infrastructure. Surprisingly, the company’s move is aligned with the goals of the current US administration.
The reaction in the market was swift. Following the announcement of these shifts, Nokia’s share price saw a 15 percent decline. This contrasts starkly with recent upward trends following a significant investment by Nvidia.
Nokia’s European downsizing is not an isolated case. The company had previously announced plans to cut between 9,000 and 14,000 jobs by 2026. However, Nokia isn’t the only telecom firm heading westward. Others, like Ericsson, are also focusing on North American investments, directing funds toward compliance with US initiatives like the Build America Buy America Act.
Simultaneously, US technology firms are expanding into Europe to adapt to changing EU sovereignty rules. Giants like AWS and Google are investing heavily in European sovereign cloud regions, aiming to establish a strong local governance presence.
The timing of Nokia’s decisions seems at odds with broader geopolitical strategies. Yet, these moves might reflect pressures from global market dynamics and technological innovation cycles. European sentiment appears increasingly uneasy as critical technology capabilities diminish domestically. It’s a development that telecom professionals and market observers will be following closely.
