Nokia announces biggest organisational overhaul in years

Nokia has announced its largest organisational overhaul in years at its 2025 Capital Markets Day in Espoo, Finland.

The changes include a revised operating model, a new long-term financial target for 2028, updated strategic KPIs, and adjustments to the Group Leadership Team. The company said the overhaul is designed to position it for a period of accelerating demand for advanced connectivity, cloud expansion, data centre and AI growth.

At the centre of the changes is a structural reorganisation that will take effect at the start of 2026, splitting the business into two primary operating segments: Network Infrastructure and Mobile Infrastructure.

Network Infrastructure will consolidate Nokia’s existing Optical Networks, IP Networks, and Fixed Networks units and identified as being a key growth lever for the business.

Mobile Infrastructure will combine the Core Networks, Radio Networks, and Technology Standards units. This creates a single segment encompassing Nokia’s 3GPP-based mobile technology portfolio, its radio access business, and IP licensing operations. The company commented that the new segment is intended to streamline operations and focus on mobile network software, radio equipment, and standards development.

Nokia also took the opportunity to announce changes to the leadership team. Raghav Sahgal will take up the newly created role of chief customer officer, overseeing customer relationships across the reorganised company. Patrik Hammarén will continue as president of technology standards, while Tommi Uitto, currently a senior leader in the mobile business, will leave the team at the end of December.

The restructuring follows an internal review of Nokia’s broader business portfolio. The company has created a new segment, Portfolio Businesses, to house units no longer considered core to its long-term strategy. These include the Fixed Wireless Access CPE business, the Site Implementation and Outside Plant unit, the Enterprise Campus Edge unit, and the Microwave Radio business. While these units generated approximately €0.9 billion in net sales over the past year, they reported an operating loss of €0.1 billion.

Nokia also announced the creation of an incubation unit, Nokia Defense, which will serve as the central hub for research, development, and market engagement on defence-oriented connectivity solutions, building on their existing work with U.S. federal customers.

The company also set a new long-term financial target, aiming for comparable operating profit of between €2.7 billion and €3.2 billion by 2028, up from €2.0 billion in the twelve months through the third quarter of 2025. This replaces previous long-term targets, including the goal to grow faster than the market and maintain a comparable operating margin of at least 13 percent. Nokia said the new target provides a clearer framework to assess progress amid structural changes.

Alongside the profit target, Nokia outlined performance indicators to show how its business segments are expected to contribute to long-term value creation. These include revenue growth expectations for Network Infrastructure, margin targets for both segments, and planned reductions in group-level operating expenses.

The company also provided provisional financial figures under the new segment structure, based on results from the fourth quarter of 2024 through the third quarter of 2025. Under this model, Network Infrastructure would have generated €7.8 billion in net sales and €0.8 billion in operating profit, while Mobile Infrastructure would have generated €11.6 billion in net sales and €1.5 billion in operating profit.

The Portfolio Businesses segment would have contributed €0.9 billion in net sales and reported an operating loss. The comparable total across all units was €20.3 billion in net sales and €2.0 billion in operating profit, including the impact of Nokia’s acquisition of Infinera.

Nokia said it will begin reporting under the new structure in the first quarter of 2026 and will restate financial results for 2024 and 2025 to allow comparison over time. Once the new reporting begins, the company plans to release quarterly financial results for the three segments, with separate revenue disclosures for the business units within Network and Mobile Infrastructure.

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