Finnish telecommunications equipment manufacturer Nokia is further scaling back its operations in China. On August 14, US-based communications industry media outlet Light Reading reported that Nokia will close a research and development center in Hangzhou, China, affecting approximately 1,600 jobs. Finnish media subsequently reported that the research unit primarily focused on radio technology development.
According to Light Reading, Nokia management has sent emails to employees in Hangzhou informing them of the closure of its R&D facilities. Their reporters have seen the internal emails and screenshots of employee chats. The report cites sources indicating that some Nokia locations in Beijing, Chengdu, Qingdao, and Shanghai may also be affected in this round of restructuring. Currently, there is no publicly available information regarding specific adjustment plans for these cities.
The R&D team is the first to be affected by the decline in market share.
Zhou Fei (pseudonym), an engineer working in communications networks, told our station that Nokia's business in China has been decreasing in recent years, and the R&D department was the first to feel this change: "In recent years, many technology companies have withdrawn from the mainland, which is an inevitable reality. First of all, Huawei has a monopoly position, and Nokia, despite having the technology, cannot compete with the monopoly. Unless you cooperate with Huawei and give some of your technology to domestic technology companies, your products will not sell. Otherwise, they will not give you orders."
A Nokia spokesperson confirmed to Light Reading that the company is adjusting its China business, stating that it has been declining in the past few years and is readjusting its operational layout. After acquiring full control of Nokia Shanghai Bell by the end of 2025, Nokia will begin to further integrate its China business into its global operations. When announcing its second-quarter results in July, the company raised its restructuring cost forecast, with some of the funds earmarked for adjustments to its China business.
Wang Tao (pseudonym), a network engineer who previously worked for a foreign company, said in an interview that foreign equipment manufacturers used to be able to participate in large-scale projects for telecom operators in China and also set up R&D teams. Now, their market share is being squeezed by domestic technology companies: "More importantly, do your products still have a sufficient local market? If major operators increasingly concentrate their procurement on Chinese manufacturers, foreign companies' R&D centers will eventually have to reassess whether they should continue to stay in China. Currently, Chinese technology products are being exported in large quantities."
Foreign technology companies face "supply chain security" challenges.
According to publicly available information, Nokia's average number of employees in Greater China will decrease from approximately 13,700 in 2020 to approximately 7,200 in 2025. In 2025, sales in Greater China will reach €913 million, a decrease of more than half compared to nearly €2.2 billion in 2018.
Prior to Nokia's recent restructuring, several international technology companies had already reduced their R&D or technical teams in China. In May 2024, Microsoft offered approximately 700 to 800 Chinese employees opportunities for overseas transfers; in April 2025, Microsoft's joint venture, MicroPort Software, ceased operations in China, with layoffs primarily affecting approximately 2,000 Microsoft outsourced employees. On August 13th of this year, Reuters reported that Microsoft had closed at least 15 branches and joint ventures in China over the past five years.
This station previously reported that in March 2025, IBM China Investment Co., Ltd. and its branches ceased business operations, closing offices in Beijing, Shanghai, Dalian, and other locations, affecting approximately 1,800 employees. Prior to this, IBM had already transferred research and development work from its China Systems Labs to other overseas locations.
China strengthens technology and data security review
In March 2023, the Cyberspace Administration of China initiated a cybersecurity review of products sold in China by U.S. chipmaker Micron Technology, citing "ensuring the security of the supply chain for critical information infrastructure." In May of the same year, it announced that Micron's products had failed the review and demanded that Chinese critical information infrastructure operators cease procurement. The revised Counter-Espionage Law also came into effect in July of that year, expanding the scope of data, documents, and materials related to national security.
Hu Liren, a private entrepreneur who previously worked in the technology industry in Shanghai, told this station that in addition to the expansion of market share by Chinese domestic telecommunications companies, changes in the global telecommunications industry cycle and R&D costs in China have also affected Nokia's business layout. He said, "Now that 5G construction is basically complete and 6G has not yet been truly commercialized, the industry is in a trough. In addition, the income of Chinese technology personnel is gradually aligning with international standards, and Nokia's R&D and operating costs in China are also constantly rising."
According to the Finnish newspaper Helsinki, the Hangzhou research and development unit, which mainly focuses on radio technology development, will close by the end of this year.
