Exclusive|Nokia to close almost all sites in mainland China by year end: sources

Finnish telecoms equipment giant Nokia plans to cut most of its workforce in mainland China and close sites in stages by year end, marking a sweeping retreat after more than four decades as it loses ground to domestic rivals, according to sources familiar with the situation. One Shanghai-based source said teams in both Nokia’s mobile networks and network infrastructure businesses in mainland China were set to undergo lay-offs in batches, with most of the cuts expected to be completed by the end of this year. While the total number of employees who would be affected remains unclear, Nokia had about 7,200 staff in mainland China, Hong Kong and Taiwan at the end of 2025, its annual report showed, with sites in cities such as Beijing, Shanghai, Hangzhou, Chengdu and Qingdao. The sources said Nokia announced its plan to scale back mainland China operations earlier this month during an internal online video conference from its Helsinki headquarters. Only after-sales services would remain in China, which would constitute “basically a gradual exit from the market”, one person said. A Shanghai-based former Nokia employee who had worked in its software testing division said he left the company in the past few weeks, receiving an “N+3” severance package – compensation based on years of service, “N”, plus three months’ pay. The source said that some employees in the country had already transferred to Nokia’s headquarters in Finland earlier this year. An employee at Nokia’s Hangzhou research and development centre, who was also affected by the latest round of cuts, confirmed the company was winding down much of its China operations. Nokia’s retreat from China, which had been gradual, accelerated recently. Last week, telecoms industry publication Light Reading reported that Nokia would close its R&D facility in Hangzhou, resulting in the loss of about 1,600 jobs. Nokia confirmed the closure of the Hangzhou site to the South China Morning Post, with a statement saying: “Nokia has been taking steps to better align its operations in China with Nokia’s global mode of operation.” When asked whether Nokia planned to phase out and close all of its sites in China by the end of the year, as well as lay off all China-based employees and retain only a limited after-sales team, the company did not directly confirm or deny the claim. “Further, Nokia’s business in China has steadily declined over the last several years. Thus, we are adjusting our operational footprint in China to address this reality,” a Nokia spokesperson said in the same response to the SCMP. One of the Shanghai employees said government agencies and state-owned companies had increasingly favoured domestic technology and equipment in recent years, leaving less room for Nokia’s telecoms products. Business from private-sector enterprise customers had also shrunk, the person added. Nokia’s revenue in China fell from €1.84 billion (US$2.12 billion) in 2019 to €913 million last year, while the region’s share of group revenue dropped from 7.9 per cent to 4.6 per cent over the same period, earnings showed. Nokia entered China in 1985, opening its first office in Beijing as a telecoms equipment supplier. It became deeply involved in the country’s network buildout during the 1990s and later emerged as one of the country’s most popular mobile phone brands. Revenue in China peaked at €7.62 billion in 2010, when China was Nokia’s largest single-country market globally. As competition in mobile phones intensified, Nokia sold most of its Devices & Services subsidiary to Microsoft in 2014, leaving telecoms network equipment as the core of its operations in China. However, its business was increasingly sidelined during the buildout of 5G infrastructure in China, and Nokia lost ground to domestic players such as Huawei Technologies and ZTE. The latest retreat follows a broader restructuring of Nokia’s China operations after the company took full ownership late last year of Nokia Shanghai Bell, its former joint venture with state-backed China Huaxin. Nokia said in its latest earnings that it expected to see €350 million in integration charges by the end of 2026 as it folds the China business into its global operating structure, targeting about €200 million in cost savings. It now aims to complete the integration within two years, faster than the two to three years initially planned, according to the same earnings report. Nokia joins a growing list of foreign technology companies that have scaled back once-substantial operations in China amid intensifying local competition, weaker commercial returns and growing geopolitical barriers. IBM closed its main China research and development units in 2024, affecting more than 1,000 employees, while Microsoft has closed branches and joint ventures over the past five years and moved some cloud and artificial-intelligence researchers overseas. Amazon closed its Shanghai AI lab last year after earlier retreats from e-commerce and e-books. Additional reporting by Howard Liu