Nokia's Chinese Exit Accelerates: A 42-Year Era Ends as the Finnish Group Recalibrates Westward

Nokia to shutter nearly all China operations by end-2026, cutting 7,200 jobs and incurring €800M in restructuring costs as it pivots to US and AI markets.

The curtain is finally coming down on Nokia's mainland China operations. After more than four decades of presence, the Finnish network equipment maker will shutter nearly all of its facilities in the country by the end of 2026, leaving behind little more than a pared-down after-sales service. The move touches roughly 7,200 employees across Greater China — a workforce that stood at 13,700 as recently as 2020.

At the heart of the wind-down is the closure of the Hangzhou research center, which employs around 1,600 people. The phased reduction, which extends through December 2026, could also affect sites in Beijing, Chengdu, Qingdao and Shanghai, with some staff already relocated to Finland.

A Decline Years in the Making

The retreat formalizes a trajectory that has been visible for some time. Revenue from Greater China has collapsed from €2.2 billion in 2018 to €913 million in 2025 — a 58 percent slide. The region now accounts for just 4.6 percent of Nokia's total sales, a stark contrast to Europe's 31 percent and North America's 31.2 percent.

Nokia points to sustained business deterioration and competitive pressure from domestic players Huawei and ZTE, which — together with Ericsson, Samsung and Nokia itself — control roughly 96 percent of the global RAN market. CEO Tommi Uitto has also cited China's growing tendency to exclude Western network vendors on national security grounds. The combined market share of Nokia and Ericsson in China's 5G segment has dwindled to around 3 percent.

The Price of Pivoting

The strategic shift doesn't come cheap. Nokia anticipates restructuring costs of €800 million in total, with €350 million earmarked for the China measures alone. Management expects annual savings of roughly €200 million from the exit, though some reports suggest the full restructuring could unlock as much as €1.2 billion in savings.

The company is simultaneously signaling where its future lies: plans for $4 billion in US investments underscore a decisive westward pivot, one with clear geopolitical undertones.

Market Jitters Meet Analyst Conviction

Investors initially balked at the announcement. Shares on the Nasdaq Helsinki fell 7.29 percent on Tuesday to €8.90, though the stock has since stabilized, trading around €9.12 in Helsinki and €8.91 in Germany — a 1.2 percent gain on the day in the Finnish capital. The equity remains roughly 9 percent below its 50-day moving average of €10.02, reflecting lingering short-term unease, while sitting comfortably above the 200-day average of €8.16.

That nervousness hasn't dented analyst confidence. JPMorgan's Sandeep Deshpande reaffirmed an "Overweight" rating with an €18 price target, calling Nokia a top pick. The bank argues the consensus underestimates how strongly the order book supports earnings estimates for 2027 and 2028, driven by Nokia's positioning in AI and cloud and by market share gains in IP networking. For the US listing, JPMorgan runs an even more ambitious target of $21.

There's also notable movement on the institutional side: Bank of America increased its Nokia stake by 105.2 percent in the first quarter, to just over 2.4 million shares.

A Leadership Position, Independently Confirmed

Separate from the China story, research firm Omdia this week reaffirmed Nokia's dominance in mobile core networks. In its "Market Landscape: Core Vendors" 2026 report, Nokia took first place across all seven evaluated categories for the second consecutive year — spanning portfolio breadth, cloud-native maturity, and AI and analytics capabilities — among twelve assessed vendors. Nokia also operates the world's first commercial 5G core solution delivered as software-as-a-service.

The company thus navigates between two contrasting realities: a China business in terminal decline, now being wound down with finality, and a technological leadership position in core markets where Nokia intends to concentrate its firepower. For investors, the picture is equally split — the China exit carries short-term costs in revenue and sentiment, but the structural story in AI, cloud and core networking remains, in the eyes of several analysts, very much intact.