Nokia CEO Pekka Lundmark today shared more details about his turnaround strategy for the company, an effort that he said will continue through the end of 2023. 

The company’s executive team will shrink from 17 people to 11, at least 14,000 employees are being moved from corporate functions to Nokia’s four new business groups, and the leaders of those four divisions have been named.

More significant decisions that could potentially see parts of Nokia’s business divested, spun off, or otherwise transitioned into other frameworks have been put off for the time being, and the company’s new corporate structure with four primary business units will formally commence on January 1, 2020.

Nokia is providing no financial guidance for 2021 or any future years, but it is expected to share more details with investors in a few months.

Tommi Uitto will serve as president of Mobile Networks, Nokia’s largest business but also among its most challenged as it continues to work through a years-long plan to shift from high cost system-on-a-chip silicon to FPGAs. Mobile Networks, which includes Nokia’s radio access network (RAN), microwave radio link products, and network planning, deployment, and support services, is expected to return no profit in 2021, but Lundmark said he is confident the unit will eventually improve its financial performance.

The No. 1 goal of the company is to “repeat our 4G success in 5G,” he said. “The expectation is roughly zero profitability [in 2021] and longer term significant improvement. Next year will be a challenging year” with margins and pricing pressures especially strong in North America, he added. 

Nokia has 133 commercial 5G deals to date and Lundmark said the company is determined to improve its position on open RAN, virtualized RAN, and expand its footprint on private enterprise networks. 

Network Infrastructure, which includes Nokia’s IP, optical, fixed, and submarine networks, will be led by Federico Guillén. Cloud and Network Services, which includes communications software, mobile core, enterprise, cognitive and managed services, will be led by Raghav Sahgal. Nokia Technologies, which includes Nokia’s patent, technology, and brand licensing, will be led by Jenni Lukander. 

Lundmark said the four business units have been formed around Nokia customers’ typical buying situations to reduce complexity and decentralize decision making. The presidents of each business group will be accountable for the performance of their respective unit, he said.

“The current organization that is still valid until the end of the year, in many parts of it it’s actually fairly complicated” with a large management team, Lundmark said. “In today’s model, even in a fairly straightforward mobile access deal, there are five management team members that are in a way partially responsible for that deal and that takes a lot of coordination and effort.”

Starting in January, “it will be very simple, it will be in one business group, that whole part of the network, and the same logic follows to other parts of the network,” he said.