Once far ahead, now largely past its prime, media reports indicate that Finnish telecom equipment giant Nokia is initiating a large-scale contraction plan in the Chinese market — expecting to lay off most employees by the end of this year and close factories across various regions in phases.
This means that the veteran communications giant, which has been deeply rooted in China for over forty years, is officially entering the exit channel under continuous pressure from local competitors.
Sources revealed that Nokia's mobile network and network infrastructure business teams in China will undergo phased layoffs, with most completions expected by the end of the year.
A source stated that only after-sales services will be retained at that time, which "basically means a gradual exit from the market."
According to a former Nokia Shanghai employee who recently resigned, the layoff compensation follows an "N+3" scheme — meaning severance pay calculated based on years of service (N), plus three months' salary.
Although the exact number of affected employees has not been disclosed, Nokia's annual report shows that as of the end of 2025, the company had approximately 7,200 employees in mainland China, Hong Kong, and Taiwan, with operations spanning cities such as Beijing, Shanghai, Hangzhou, Chengdu, and Qingdao.
In contrast to the contraction in the Chinese market, Nokia is fully transitioning towards AI and cloud computing.
The Q2 financial report released by the company on July 23 showed that due to increased restructuring costs, current profits were only €5 million, far lower than the €96 million in the same period last year; however, revenue grew by 8% year-on-year to €4.8 billion, meeting market expectations.
Among these, AI and cloud computing emerged as the biggest highlights — total orders in this sector reached €2.8 billion in the second quarter, with revenue doubling compared to the same period last year.
Nokia CEO Justin Hotard stated that the company is transforming its business around the needs of tech giants building data centers and strengthening cloud computing capabilities.
It is worth noting that there were previous reports that Nokia planned to close its R&D center in Hangzhou, resulting in approximately 1,600 layoffs.
Screenshots and internal emails obtained by Light Reading have confirmed the closure plan, showing that affected employees have already begun internal discussions.
Additionally, signs indicate that other Nokia factories in Beijing, Chengdu, Qingdao, and Shanghai may also close as part of the latest restructuring plan.