- Nokia will simplify operations into two primary segments from 1 January 2026: one focused on AI and cloud, the other on mobile network technologies.
- The company targets a significant increase in profitability by 2028, driven by cost restructuring and strategic realignment.
What happened: Nokia launches major overhaul, betting big on AI and network restructuring
Nokia has announced a sweeping reorganisation of its business, declaring it one of the most significant structural changes in years. At its Capital Markets Day in 2025, the Finnish telecoms firm revealed plans to streamline its operations into two main operating segments: Network Infrastructure and Mobile Infrastructure, effective from 1 January 2026.
Under this new model, the Network Infrastructure arm will include optical networks, IP networks, and fixed networks—a segment Nokia sees as its “growth engine” as demand for AI, cloud, and data-centre services accelerates. Meanwhile, the Mobile Infrastructure division will unite core networks, radio access, and technology standards (including its 3GPP-based portfolio), aligning with the company’s ambitions around AI-native mobile connectivity and 6G.
As part of the overhaul, Nokia is also reducing its workforce. It plans to cut its headcount to 80,000–85,000 employees over the next 18–24 months to better align costs with its streamlined business model. Meanwhile, its leadership team is being refreshed: the company has established a Technology & AI organisation alongside a Corporate Development unit, appointing Pallavi Mahajan as Chief Technology & AI Officer and Konstanty Owczarek as Chief Corporate Development Officer.
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Why it’s important
The shake-up underlines Nokia’s bold pivot: it is repositioning itself from a traditional telecom-equipment vendor to a provider deeply embedded in the AI-powered cloud and data-centre infrastructure landscape. By simplifying its structure into just two operating units, Nokia hopes to be more agile and to tailor its investments to where future demand is strongest.
This transformation also signals longer-term discipline around cost management. The planned headcount reductions and sharper capital allocation suggest Nokia is serious about maximising returns and sustaining growth in a competitive market. With the newly created leadership roles and a clearer focus on AI and corporate development, Nokia appears to be laying the foundation for what it calls its “critical era in connectivity.”
If successful, this overhaul could warp the company’s trajectory, setting Nokia up as a key player not just in mobile networks—but in AI-driven infrastructure for the next decade.
