Nokia axes chief operating officer role as part of its reorg

Nokia
After a disappointing third-quarter, Nokia is eliminating its chief operating officer position. (Monica Alleven/FierceWireless)

Following on the heels of lowering its guidance for this year and next year during last month's earnings call, Nokia announced on Monday that it is eliminating the chief operating officer position.

As a result of that decision, the current COO, Joerg Erlemeier, has decided to step down from the company’s group leadership team and leave the company on Jan 1. Nokia said in its press release that the COO duties would be split up among other Nokia executives.

“Joerg has been a long-time, trusted colleague,” said Nokia President and Chief Executive Officer Rajeev Sur, in a statement. “He leaves the company with my thanks and deep appreciation for his many important contributions.”

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Prior to becoming COO two years ago, Erlemeier's previous positions at Nokia included senior vice president of transformation and COO of Mobile Networks.

“After 25 years at Nokia, I am ready to take on new challenges,” said Erlemeier. “While the company is in the midst of a transition, I leave firm in my belief that the right plan is in place to improve future performance. I wish the company and all my colleagues the very best.”

While Erlemeier had a hand in developing Nokia's mobile networks, it's hard to say whether he took part in Nokia's decision to use field programmable gate array (FPGA) silicon. Since FPGA's take longer to develop, that decision has caused Nokia to trail Ericsson and Huawei in regards to the roll out of 5G gear. Nokia will start shipping system-on-a-chip-based products next year, but it has some catching up to do.

RELATED: Nokia made a bad call for 5G chips, scrambles to rectify situation

According to a story by Reuters, Nokia announced late last month that it was hiring 350 engineers in Finland to speed up its 5G development.

The company reported its Q3 2019 earnings in October, and lowered its guidance for full year 2019 and 2020. Nokia’s stock has been down nearly 30% since the beginning of 2019, and the company has suspended its dividend for the time being. Nokia's shares plummeted by 21% after it posted its third-quarter results.

RELATED: FCC bans use of USF funds for Huawei, ZTE equipment

On the plus side, Nokia could see a bump in its fortunes after the Federal Communications Commission (FCC) unanimously voted on Friday to ban the use of Universal Service Fund (USF) dollars to purchase telecom equipment and services from vendors that pose risks to national security, which was targeted at China-based vendors Huawei and ZTE.

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