Nokia's Strategic Pivot to AI Triggers Major Workforce Reduction

The Finnish telecommunications equipment giant, Nokia, is embarking on a profound structural transformation. In a decisive move to sharpen its focus on burgeoning artificial intelligence infrastructure, the company plans to eliminate up to 14,000 positions globally. This substantial cut represents approximately one-fifth of its worldwide workforce. The radical strategic shift is currently creating a sharp divide among Wall Street analysts, generating starkly contrasting viewpoints.

Conflicting Analyst Sentiment Emerges

The company's reorientation and a preceding stock rally have resulted in dramatically opposing expert assessments. On Friday, prominent financial institutions issued revised ratings that highlight the market's uncertainty.

• Goldman Sachs upgraded its stance on Nokia to "Neutral" from a previous "Sell" recommendation. The firm significantly raised its price target to 8.00 euros from 3.50 euros, citing growth potential in optical and IP networks.
• Grupo Santander, however, downgraded the stock to "Underperform" from "Outperform," setting a price target of 6.85 euros. Analysts there primarily justified the move as a profit-taking call following the equity's strong recent performance.

These contradictory signals impacted trading. Nokia's shares declined by nearly four percent on Friday to 6.90 euros. Despite this dip, the stock maintains a robust year-to-date gain of almost 24 percent.

Should investors sell immediately? Or is it worth buying Nokia?

Restructuring for a New Profitability Framework

The extensive job reductions are a central component of Nokia's plan to align its cost structure with long-term profitability targets. This step underscores a significant evolution in the company's business model. Revenue from traditional mobile network infrastructure, which once constituted half of total sales, has recently fallen to around 30 percent.

Nokia is now channeling its resources toward AI and cloud infrastructure, a sector where it ended the last year with an order backlog of roughly 2.5 billion euros. Demonstrating its commitment, the company recently participated in a $45 million funding round for ODC, a specialist in AI-powered radio access networks. In collaboration with partners including Nvidia and Cisco, Nokia aims to integrate artificial intelligence directly into baseband processing. The goal is to optimize energy efficiency and spectrum utilization for future 6G networks.

Investors will gain their first concrete look at the financial impact of the restructuring costs and the new AI order backlog when Nokia reports first-quarter earnings. The company is scheduled to release these results before the market opens on April 23, 2026. Current market consensus estimates project a profit of $0.04 per share on revenue of $4.59 billion.

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