UK jobs in peril as Nokia eyes rival

THERE are fears British high-tech jobs could be lost after Nokia entered takeover talks with French rival Alcatel-Lucent.

The £30bn mega-deal would be likely to result in cuts being made to both businesses.

And France is set to demand safeguards for its Alcatel employees – making it more likely that the axe will eventually fall on UK staff.

Nokia, which sold its once-iconic mobile phone business to Microsoft two years ago, makes telecoms network equipment and employs 800 staff in the UK in sales and also research and development.

Meanwhile Alcatel last year slashed 300 British roles as it closed offices in Swindon, Newport and Maidenhead – taking its total UK headcount to below 1,000.

The two companies between them employ almost 2,000 staff in Britain.

Nokia yesterday said it ‘is in advanced discussions with respect to a potential full combination, which would take the form of a public exchange offer by Nokia for Alcatel-Lucent’.

The deal will significantly improve Nokia’s access to China, a market with 1.3bn mobile users. It would also give Nokia major US contracts with the country’s biggest network operators, Verizon and AT&T. Merging the two firms will also allow them to take on industry leader Ericsson.

The takeover requires approval from socialist French president Francois Hollande, whose far Left administration has previously tried to block mergers in France, and is likely to require assurances over French jobs for the deal to take place.

Nokia’s fortunes have transformed from two years ago, when it was fast running out of cash raising fears over its future. The advent of smartphones, and the ascendance of Apple and Samsung as the dominant players in internet phones, left the Finnish firm trailing. Two years ago it reached a deal to sell its handset division to Microsoft for £4.5bn.

The move also allowed Microsoft, which provides the Windows Phone software for Nokia’s handsets, to become a player in the physical phone market. Microsoft has since ditched the Nokia brand, opting to keep the Lumia name instead.