Nokia in China: The Hangzhou R&D Hub Closure and a 58% Revenue Collapse

The workforce has shrunk in tandem. Average headcount in Greater China fell from 13,700 in 2020 to approximately 7,200 by 2025 . This includes earlier cuts: in October 2024, Nokia laid off close to 2,000 employees in the region — roughly 20% of its workforce there at the time — as part of a broader cost-reduction plan .

The Geopolitical Trigger: Huawei's Ban

The root cause of Nokia's China collapse is geopolitical. In 2019, the United States banned Chinese telecom giant Huawei from its networks, a move followed by several other Western countries. Sweden later banned Chinese vendors from its own 5G infrastructure. China retaliated by effectively excluding Swedish and Finnish equipment vendors — Ericsson and Nokia — from its state-owned telecom operators' contracts .

Nokia CEO Justin Hotard has been blunt about the situation, describing China as a market where Nokia is "not a player" and warning of further European job cuts as the company reorients its strategy away from the region . The company's Greater China sales, which once accounted for 27% of its net sales, now represent just 6% .

A €350 Million Restructuring Charge

The cost of Nokia's China exit is substantial. The company expects to recognize approximately €350 million in charges in 2026 specifically for the restructuring of its Chinese operations . This includes the Hangzhou closure and the full integration of Nokia Shanghai Bell, a joint venture with state-backed China Huaxin that Nokia took full ownership of at the end of 2025 .

These China-specific charges are part of a much larger global restructuring program. Nokia now anticipates total restructuring charges of roughly €800 million in 2026, a sharp increase from its original guidance of €250 million . By integrating its China business with global operations, CEO Hotard hopes to realize cost savings of about €200 million .

Global Workforce: From 103,000 to 78,000

The Hangzhou closure is the latest milestone in a prolonged global headcount reduction. Nokia's workforce has declined from approximately 103,000 employees in 2018 to about 78,000 by 2026 . In late 2023, Nokia announced plans to cut up to 14,000 jobs — roughly 16% of its then 86,000-strong workforce — aiming to reduce its employee base to between 72,000 and 77,000 by the end of 2026 . The plan was designed to save between €800 million and €1.2 billion annually .

A particular point of concern for European employees: Nokia is also cutting 350 jobs in Europe as part of the same cost-cutting program .

The Same Story for Ericsson: Symmetrical Collapse

Nokia's Swedish rival Ericsson has experienced an almost identical trajectory in China. Ericsson's China revenues surged to nearly 18.8 billion Swedish kronor in 2020, driven by 5G contract wins, but then collapsed dramatically . By 2025, Ericsson's China revenues had fallen to roughly 7.1 billion kronor — less than 40% of 2020 levels, representing just 3% of the company's total sales . Light Reading called it a "collapse" and reported that Ericsson's China sales in 2025 were less than 40% of 2020 levels .

Both vendors have been largely locked out of China's 5G market on national security grounds, particularly after Sweden's ban of Huawei prompted Chinese operators to retaliate against Swedish and Finnish suppliers .

Key Data at a Glance

These figures are drawn from Nokia's and Ericsson's official filings, annual reports, and reporting by Light Reading and other trade outlets .