Börje Ekholm, who will relinquish the CEO job at Ericsson in a number of weeks, has usually sounded stuffed with admiration for China and greater than a bit of envious of the large funding it has made in 5G, the cell know-how that has come to outline his legacy. Had been geopolitical shifts to culminate within the breakup of a 6G customary, China would make a “formidable” rival whose R&D muscle might dwarf the West’s, he told Light Reading 5 years in the past. If the specter of 6G bifurcation has since receded, it has confirmed past Ekholm’s powers to defend Ericsson’s presence in China and maintain a worldwide ecosystem collectively.
Each Ericsson and Finnish rival Nokia are significantly much less Chinese language than they had been on the time of that interview, simply as China’s Huawei and ZTE are far much less European. The obvious manifestation of all that is the gross sales stoop the Nordic distributors have skilled in China and the relative slowdown that Huawei has seen in Europe. International producers would possibly depend on labor sources in a single a part of the world to fulfill demand elsewhere. However Ericsson and Nokia have concurrently slashed 1000’s of jobs at their Chinese language services as native revenues have dropped.
Within the newest instance, Nokia is closing an R&D facility in Hangzhou this 12 months with the lack of about 1,600 jobs. After particulars had been shared by an nameless supply, Nokia confirmed the plans and mentioned they mirrored the regular decline of its enterprise in China and efforts to align its Chinese language operations with these worldwide. The speedy catalyst was Nokia’s transfer in late 2025 to take full management of Nokia Shanghai Bell, the Chinese language three way partnership it had operated with state-backed China Huaxin. Months earlier than, Nokia had been notified that it was going to be fully excluded from Chinese language tenders for nationwide safety causes, executives told reporters at a Finnish press occasion final September.
Relentless cuts
There isn’t any point out of the Hangzhou facility in Nokia’s previous few annual reviews and little to be discovered on-line. A webpage itemizing Nokia’s workplaces in Higher China, which incorporates Hong Kong and Taiwan, consists of two separate Hangzhou addresses. Much more informative is a press release from early-Trumpian 2018 that discusses the institution of a joint “AI*5G” (a forerunner of AI-RAN?) lab in Hangzhou with China Cell. On the time, Nokia would have hoped to safe an honest share of upcoming 5G contracts with the world’s largest telco. It emerged with virtually nothing.
The elimination of 1,600 roles would shrink Nokia’s Higher China workforce to round 5,600 workers, based mostly on year-average figures included within the firm’s most up-to-date annual report. A decade in the past, after finishing its €15.6 billion (US$18.1 billion) takeover of Alcatel-Lucent, it employed as many as 18,929 folks in China alone.
(Supply: Corporations. Be aware: Nokia figures embrace workers in Hong Kong and Taiwan)
Cuts have been relentless ever since, lowering Nokia’s headcount in Higher China from 10,400 in 2023 to 7,200 final 12 months. Buried within the footnotes of its annual report for 2024 is a reference to the disposal of a manufacturing facility in Suzhou producing radiofrequency techniques. Its “productive capability” had already shrunk from 23,000 sq. meters in 2021 to 13,000 on the time of the disposal. At present, Nokia owns no manufacturing websites in China.
Within the context of at the moment’s enterprise and geopolitical local weather, any realignment of Chinese language operations subsequently appears unlikely to finish with the closure of the Hangzhou facility. In a messaging alternate obtained by Mild Studying, a Nokia worker discussing the most recent cuts instructed others that websites would even be closed in Beijing, Chengdu, Qingdao and Shanghai.
Ericsson reportedly took similar steps about two years in the past, reducing an undisclosed variety of R&D jobs in China and telling this publication by e mail that “we frequently make regular enterprise changes and are diversifying our core community engineering R&D footprint in alignment to gross sales.”
That adopted Ericsson’s decision in late 2021 to scrap a whole lot of native jobs after a lack of 5G market share. Three separate buyer items, every catering to one in all China’s large telcos, had been merged right into a single group as a part of that restructuring. Just some weeks later, Ericsson bought an R&D facility in Nanjing, with roughly 650 workers, to a Finnish firm known as Tietoevry (now rebranded as Tieto).
Nanjing stays the placement of the one Asian manufacturing web site that Ericsson instantly owns, in line with its newest annual report. However, whereas its China headcount has not fallen as sharply as Nokia’s lately, Ericsson nonetheless managed to chop greater than 3,500 native jobs between 2022 and 2025, round a 3rd of the sooner whole. Between them, Ericsson and Nokia have diminished their headcount in China by round 8,500 workers, or 37%, since 2021.
As each firms have mentioned, the discount partly displays the lack of enterprise over this era. Ericsson’s annual gross sales in China fell from about 18.7 billion Swedish kronor ($2.8 billion) in 2020 to round SEK10.1 billion ($1.5 billion) the next 12 months, when it was seemingly punished for the Swedish authorities’s determination to ban Huawei and ZTE from the Swedish market. Revenues have by no means recovered and by final 12 months had dipped to only SEK8.2 billion ($1.2 billion).
Having earned as a lot as €2.17 billion ($2.5 billion) from gross sales to prospects in Higher China in 2018, Nokia reported revenues of solely €913 million ($1.06 billion) final 12 months. Again in 2019, Ericsson boasted a ten% share of the Chinese language market and was concentrating on progress. But by late 2025, the mixed market share of the Nordic distributors was all the way down to as little as 3%, in line with Nokia executives. Given their feedback about exclusion, they clearly consider it’s going to proceed to fall.
Reallocation of sources
However it might most likely be unsuitable to imagine dwindling gross sales present the complete clarification for job cuts in China. Automation and the expansion of China’s center class had made the nation much less enticing for low-cost labor earlier than Donald Trump turned president the primary time spherical. Extra not too long ago, protectionism and the specter of tariffs have compelled each Ericsson and Nokia to shift manufacturing to the US.
In 2018, when Nokia claimed ten international manufacturing websites together with the Suzhou facility, only one was within the US, equally devoted to radiofrequency techniques. Of the 4 websites that Nokia owned final 12 months, one was in Finland, one other was in India and two had been on American soil. A property in California is described as a compound semiconductor wafer fab and check facility, whereas a web site in Pennsylvania works on superior packaging for photonic built-in circuits. Over this era, in fact, Nokia has misplaced 5G market share within the US however grown in optical via its takeover of Infinera.
The massive change at Ericsson, which now dominates the US cell market, has been the opening in 2020 of a extremely automated manufacturing facility close to Dallas. The intention was at all times to provide a lot of the items bought to US prospects on American turf. And the US is now Ericsson’s largest particular person market by far. Earlier than Ekholm took cost, it generated a few quarter of the corporate’s revenues. By 2025, that had climbed to 41%.
For each distributors, one concern has been the dearth of alternate options to China for low-cost and passive elements comparable to printed circuit boards. “If we at the moment are going to construct an identical ecosystem within the US, it is not going to occur in a single day,” said Per Narvinger, the pinnacle of Ericsson’s cell networks enterprise group (and incoming CEO), on a name with Mild Studying in April final 12 months. Extra not too long ago, a spike in the price of reminiscence chips produced exterior China has supplanted that concern, with rampant AI demand held accountable.
However cutbacks in China, particularly in R&D, might reignite the fears Ekholm expressed concerning the emergence of two separate 6G ecosystems – no matter what occurs to the precise customary. Even a tiny share of the market would give the Nordic firms a style of what some consider to be essentially the most superior 5G deployments on the planet. If it disappears, Ericsson and Nokia can be shut out of the groundbreaking 6G initiatives in China that contain drones, robotics, AI and cell’s most cutting-edge options. European and even North American markets could appear a poor substitute.
Because the Nordic distributors proceed to retreat from China, they’ll inevitably lose entry to the experience that surfaces inside its large inhabitants. Such an unlimited pool of expertise will, successfully, be cordoned off. “China, amongst different rising economies, has made huge strides in schooling and graduates considerably bigger numbers of engineers every year to maintain tempo with the demand for specialists,” mentioned Ekholm in August 2021. If he might have glimpsed the longer term again then, he won’t have appreciated what he noticed.
