Nokia managers at risk as CEO warns ‘it may be time for change’ | Light Reading

Nokia managers at risk as CEO warns ‘it may be time for change’ | Light Reading

A cull of Nokia’s leadership team has already claimed the jobs of several high-profile executives as new CEO Pekka Lundmark aims for a less top-heavy structure.

But it is not yet finished, Lundmark told analysts this afternoon. And among the senior managers still employed under the old structure, fixed networks boss Sandra Motley and software chief Bhaskar Gorti look especially at risk.

Neither has an obvious role in Lundmark’s simplified structure. Federico Guilln, currently president of customer operations for the EMEA and APAC regions, will effectively replace Motley when he becomes the head of the new IP and fixed networks division in 2021. Gorti’s software business has been sucked into a cloud and network services unit that will be run by Rahgav Sahgal, currently head of enterprise.

Lundmark wants to reduce the size of Nokia’s group leadership team from 17 executives at the moment to just 11 in future. His main rationale is that parts of Nokia are “very complicated,” with too many people involved in the decision-making process.

The departures of five members of that team have already been confirmed. They include Barry French, the chief marketing officer; Marcus Weldon, the chief technology officer; Basil Alwan and Sri Reddy, who co-led the IP and optical business; and Sanjay Goel, the head of global services.

Table 1: Nokia’s group leadership team

Name Role Status
Pekka Lundmark CEO New
Marco Wirn Chief financial officer New
Nassib Abbou-Khalil Chief legal officer Confirmed
Barry French Chief marketing officer Out
Gabriela Styf Sjman Chief strategy officer Uncertain
Marcus Weldon Chief technology officer Out
Stephanie Werner-Dietz Chief human resources officer Confirmed
Tommi Uitto President of mobile networks Confirmed
Sandra Motley President of fixed networks At risk
Rahgav Sahgal President of Nokia Enterprise Named head of cloud and network services
Jenni Lukander President of Nokia Technologies Confirmed
Basil Alwan Co-president of IP/optical networks Out
Sri Reddy Co-president of IP/optical networks Out
Bhaskar Gorti President of Nokia Software and chief digital officer At risk
Sanjay Goel President of global services and operations Out
Ricky Corker President of customer operations, Americas Named head of customer experience
Federico Guilln President of customer operations, EMEA and APAC Named head of IP and fixed networks

This would suggest only one more job will disappear, but Lundmark sounds prepared to let go of other senior executives if he cannot find suitable roles for them next year.

“If those members of the current team who will not have seats in the future leadership team if they want to do something else I respect that and many of them have worked for us for a long time and from their point of view it may be time for change,” he said.

“Barry French, Marcus Weldon and Sanjay Goel they will leave. That has been announced. We are discussing then with the remaining in what capacity they could potentially be involved in the future, but there are no definite decisions on them at this time.”

The management cull reflects a break with the “end-to-end” strategy pioneered by Rajeev Suri, Nokia’s previous CEO. Lundmark says most customers do not want to buy all their products from the same firm and he evidently thinks Suri’s approach has slowed Nokia down.

“Even in a fairly straightforward mobile access deal there are five members [of the group leadership team] responsible for that deal and that takes a lot of coordination,” he said today. “From next year it will be one business group and the same logic follows elsewhere.”

The danger is that Nokia loses some of its brightest minds. Alwan was highly regarded for the work he did at Nokia’s optical and IP division, one of the strongest parts of the business. Weldon remains one of the most well-respected technology experts in the telecom sector.

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Other jobs may also be under threat as Lundmark aims to boost margins by “simplifying and streamlining” a business that remains less profitable than either Ericsson or Huawei, its chief rivals in the market for network products.

It has struggled despite cutting thousands of jobs last year, when average headcount across the business fell to 98,322, from 103,083 in 2018.

After further cutbacks were announced this year, average staff numbers are likely to be even lower for 2020, although details will not be available until Nokia publishes its next annual report.

Today’s update was short on specifics, with Lundmark and Marco Wirn, Nokia’s chief financial officer, promising more details about sales outlook, cost-saving plans and research-and-development activities at a capital markets day in March 2021.

Nokia is guiding for an operating margin of 7-10% in 2021 but says the new mobile access division, responsible for nearly half of company revenues, will only just break even.

Nokia’s share price was down 2% today in Helsinki at the time of publication and has fallen about 9% so far this year.

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Iain Morris, International Editor, Light Reading

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