But Ericsson and Nokia have simultaneously slashed thousands of jobs at their Chinese facilities as local revenues have dropped.
Related:Nokia quits R&D facility in China and cuts 1,600 jobsIn the latest example, Nokia is closing an R&D facility in Hangzhou this year with the loss of about 1,600 jobs.
Between them, Ericsson and Nokia have reduced their headcount in China by around 8,500 employees, or 37%, since 2021.
Yet by late 2025, the combined market share of the Nordic vendors was down to as little as 3%, according to Nokia executives.
Over this period, of course, Nokia has lost 5G market share in the US but grown in optical through its takeover of Infinera.
Börje Ekholm, who will relinquish the CEO job at Ericsson in a few weeks, has often sounded full of admiration for China and more than a little envious of the huge investment it has made in 5G, the mobile technology that has come to define his legacy. Were geopolitical shifts to culminate in the breakup of a 6G standard, China would make a "formidable" rival whose R&D muscle could dwarf the West's, he told Light Reading five years ago. If the threat of 6G bifurcation has since receded, it has proven beyond Ekholm's powers to defend Ericsson's presence in China and hold a global ecosystem together.
Both Ericsson and Finnish rival Nokia are considerably less Chinese than they were at the time of that interview, just as China's Huawei and ZTE are far less European. The most obvious manifestation of all this is the sales slump the Nordic vendors have experienced in China and the relative slowdown that Huawei has seen in Europe. Global manufacturers might rely on labor resources in one part of the world to meet demand elsewhere. But Ericsson and Nokia have simultaneously slashed thousands of jobs at their Chinese facilities as local revenues have dropped.
Related:Nokia quits R&D facility in China and cuts 1,600 jobs
In the latest example, Nokia is closing an R&D facility in Hangzhou this year with the loss of about 1,600 jobs. After details were shared by an anonymous source, Nokia confirmed the plans and said they reflected the steady decline of its business in China and efforts to align its Chinese operations with those worldwide. The immediate catalyst was Nokia's move in late 2025 to take full control of Nokia Shanghai Bell, the Chinese joint venture it had operated with state-backed China Huaxin. Months before, Nokia had been notified that it was going to be completely excluded from Chinese tenders for national security reasons, executives told reporters at a Finnish press event last September.
Relentless cuts
There is no mention of the Hangzhou facility in Nokia's last few annual reports and little to be found online. A webpage listing Nokia's offices in Greater China, which includes Hong Kong and Taiwan, includes two separate Hangzhou addresses. Far more informative is a press release from early-Trumpian 2018 that discusses the establishment of a joint "AI*5G" (a forerunner of AI-RAN?) lab in Hangzhou with China Mobile. At the time, Nokia would have hoped to secure a decent share of upcoming 5G contracts with the world's biggest telco. It emerged with almost nothing.
The elimination of 1,600 roles would shrink Nokia's Greater China workforce to around 5,600 employees, based on year-average figures included in the company's most recent annual report. A decade ago, after completing its €15.6 billion (US$18.1 billion) takeover of Alcatel-Lucent, it employed as many as 18,929 people in China alone.
Related:Ericsson cuts China headcount but says it won't quit the market
(Source: Companies. Note: Nokia figures include staff in Hong Kong and Taiwan)
Cuts have been relentless ever since, reducing Nokia's headcount in Greater China from 10,400 in 2023 to 7,200 last year. Buried in the footnotes of its annual report for 2024 is a reference to the disposal of a factory in Suzhou producing radiofrequency systems. Its "productive capacity" had already shrunk from 23,000 square meters in 2021 to 13,000 at the time of the disposal. Today, Nokia owns no manufacturing sites in China.
In the context of today's business and geopolitical climate, any realignment of Chinese operations therefore seems unlikely to end with the closure of the Hangzhou facility. In a messaging exchange obtained by Light Reading, a Nokia employee discussing the latest cuts told others that sites would also be closed in Beijing, Chengdu, Qingdao and Shanghai.
Ericsson reportedly took similar steps about two years ago, cutting an undisclosed number of R&D jobs in China and telling this publication by email that "we continually make normal business adjustments and are diversifying our core network engineering R&D footprint in alignment to sales."
Related:Ericsson profit soars as it warns of China dependency amid tariffs
That followed Ericsson's decision in late 2021 to scrap hundreds of local jobs after a loss of 5G market share. Three separate customer units, each catering to one of China's big telcos, were merged into a single group as part of that restructuring. Just a few weeks later, Ericsson sold an R&D facility in Nanjing, with roughly 650 employees, to a Finnish company called Tietoevry (now rebranded as Tieto).
Nanjing remains the location of the only Asian manufacturing site that Ericsson directly owns, according to its latest annual report. Nevertheless, while its China headcount has not fallen as sharply as Nokia's in recent years, Ericsson still managed to cut more than 3,500 local jobs between 2022 and 2025, around a third of the earlier total. Between them, Ericsson and Nokia have reduced their headcount in China by around 8,500 employees, or 37%, since 2021.
As both companies have said, the reduction partly reflects the loss of business over this period. Ericsson's annual sales in China fell from about 18.7 billion Swedish kronor ($2.8 billion) in 2020 to around SEK10.1 billion ($1.5 billion) the following year, when it was seemingly punished for the Swedish government's decision to ban Huawei and ZTE from the Swedish market. Revenues have never recovered and by last year had dipped to just SEK8.2 billion ($1.2 billion).
Having earned as much as €2.17 billion ($2.5 billion) from sales to customers in Greater China in 2018, Nokia reported revenues of only €913 million ($1.06 billion) last year. Back in 2019, Ericsson boasted a 10% share of the Chinese market and was targeting growth. Yet by late 2025, the combined market share of the Nordic vendors was down to as little as 3%, according to Nokia executives. Given their comments about exclusion, they clearly believe it will continue to fall.
Reallocation of resources
But it would probably be wrong to assume dwindling sales provide the full explanation for job cuts in China. Automation and the growth of China's middle class had made the country less attractive for low-cost labor before Donald Trump became president the first time round. More recently, protectionism and the threat of tariffs have compelled both Ericsson and Nokia to shift production to the US.
In 2018, when Nokia claimed ten global manufacturing sites including the Suzhou facility, just one was in the US, similarly dedicated to radiofrequency systems. Of the four sites that Nokia owned last year, one was in Finland, another was in India and two were on American soil. A property in California is described as a compound semiconductor wafer fab and test facility, while a site in Pennsylvania works on advanced packaging for photonic integrated circuits. Over this period, of course, Nokia has lost 5G market share in the US but grown in optical through its takeover of Infinera.
The big change at Ericsson, which now dominates the US mobile market, has been the opening in 2020 of a highly automated factory near Dallas. The intention was always to produce most of the goods sold to US customers on American turf. And the US is now Ericsson's biggest individual market by far. Before Ekholm took charge, it generated about a quarter of the company's revenues. By 2025, that had climbed to 41%.
For both vendors, one concern has been the lack of alternatives to China for low-cost and passive components such as printed circuit boards. "If we are now going to build a similar ecosystem in the US, it will not happen overnight," said Per Narvinger, the head of Ericsson's mobile networks business group (and incoming CEO), on a call with Light Reading in April last year. More recently, a spike in the cost of memory chips produced outside China has supplanted that concern, with rampant AI demand held responsible.
But cutbacks in China, especially in R&D, may reignite the fears Ekholm expressed about the emergence of two separate 6G ecosystems – regardless of what happens to the actual standard. Even a tiny share of the market would give the Nordic companies a taste of what some believe to be the most advanced 5G deployments on the planet. If it disappears, Ericsson and Nokia will be shut out of the groundbreaking 6G projects in China that involve drones, robotics, AI and mobile's most cutting-edge features. European and even North American markets may seem a poor substitute.
As the Nordic vendors continue to retreat from China, they will inevitably lose access to the expertise that surfaces within its massive population. Such a vast pool of talent will, effectively, be cordoned off. "China, among other growing economies, has made enormous strides in education and graduates significantly larger numbers of engineers each year to keep pace with the demand for specialists," said Ekholm in August 2021. If he could have glimpsed the future back then, he might not have liked what he saw.
