Finnish telecoms giant Nokia will cut up to 10,000 jobs within two years to pare back costs and invest in its research capabilities, the company announced on Tuesday.

The job cuts, representing as much as 11% of the firm’s workforce, comes as Nokia increases its focus on super-fast 5G networks and steps up its competition with rivals Ericsson and Huawei.

The layoffs will form part of a €600 million cost-cutting programme expected to last over an 18-24-month period, at the end of which Nokia expects to be “an 80,000-85,000 employee organisation” – down from its current staff of approximately 90,000.

The company said it was “too early to comment in detail” on which jobs would b cut, though it confirmed that French branches would be excluded. 1,000 of Nokia jobs in France are already being cut following the company’s 2016 acquisition of Alcatel-Lucent.

Finland is also expected to be excluded from the job cuts, as Nokia said it expected the planned restructure to have a “net positive” impact in the country. Last year, Nokia recruited over 1,200 new 5G-related posts in Finland.

Nokia CEO Pekka Lundmark announced a new strategy for the company in October, which would have Nokia operate as four business groups and “do whatever it takes” to gain a lead in 5G technology. Lundmark is expected to announced his long-term strategy and financial targets during Nokia’s capital markets day on Thursday.

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“Decisions that may have a potential impact on our employees are never taken lightly,” Lundmark said in a statement. “My priority is to ensure that everyone impacted is supported through this process.”

The announcement of layoffs comes one day after Nokia struck a deal to supply Orange, one of the world’s largest mobile operator groups, with technology to optimise its international networks.

UK telecoms giant TalkTalk has agreed to a £1.1 billion takeover deal proposed by Toscafund – its second-largest shareholder – and private equity investors Penta.

TalkTalk announced details of the takeover bid early on Thursday. Should they approve the deal, TalkTalk investors will receive 97 pence per share, a 16.4% premium on its share price on 7 October when talks first began. If this occurs, TalkTalk will be de-listed from the London Stock Exchange.

Including debt, the deal values TalkTalk at around £1.8 billion. Toscafund, which is controlled by hedge fund tycoon Martin Hughes, already controls a 30% stake in the company.

Sir Charles Dunstone, chairman of TalkTalk, spoke optimistically about the benefits the deal would bring for the ISP. “Being a private company would allow us to accelerate adoption and focus on our role as the affordable provider of fibre for businesses and consumers nationwide,” he said.

“The telecoms industry is going through a fundamental reset and we are keen to play our part in it.”

TalkTalk is a budget broadband and phone provider that provides services to around 4.2 million UK customers. In addition to announcing the takeover deal, it published its half-year results on Thursday, showing a statutory pre-tax loss of £3 million during the six months leading up to 30 September compared to a £29 million profit during the same period in 2019.

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The company said it had been heavily impacted by the COVID-19 pandemic, which had left engineers unable to visit customer premises to connect them to the network. It also noted that the closure of third-party overseas call centres had been a detriment to its customer service capabilities. While revenues from phone calls also slipped, the broadband provider noted that data usage had increased more than 40% during lockdown periods.

Shares in TalkTalk were up 1.7% in early Thursday trading. The Toscafund-Penta takeover is slated to take place in the first quarter of 2021.

Ericsson announced on Wednesday that it had been selected by BT Group to provide 5G radio equipment in major UK cities including London, Edinburgh, Cardiff and Belfast.

The completion of the contract will see 50% of BT’s 5G communications transmitted via the Ericsson Radio System kit, the telecommunications company estimated. The move will allow BT to ditch Huawei without becoming fully reliant on Nokia, its other radio access network equipment provider.

In addition to providing 5G radio equipment, Ericsson said it would “modernise BT’s existing 2G and 4G Radio Access Network” to improve its performance for BT customers.

“BT has a clear direction in how it wants to drive its 5G ambitions in the UK,” Ericsson president and CEO Börje Ekholm said in the press release, adding that the contract would strengthen the relationship between the two countries. “By deploying 5G in these key areas, we are yet again demonstrating our technology leadership in population-dense and high-traffic locations.”

Ericsson’s equipment has been used widely as part of 5G infrastructure. The company has said that it currently holds 113 commercial 5G agreements and contracts with communication service providers worldwide.

In July, following the imposition of US sanctions against Huawei, ministers announced that UK providers must stop purchasing 5G-related equipment from the Chinese telecom giant after 31 December, and must completely remove its technology from their infrastructure by 2027.

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Huawei has denied that its equipment poses a threat to national security. Earlier on Wednesday, it released a report claiming that its UK ban could cost the country thousands of jobs and upwards of £100 billion in economic benefits resulting from a slower rollout of 5G.

Details of Ericsson’s contract with BT have not been disclosed.

Finance Monthly speaks with former tech entrepreneur Gary Moon, who turned tech investment banker 16 years ago. He is currently the Managing Partner of the boutique investment bank Nfluence Partners, which focuses on M&A and capital formation advisory across various technology, media & telecom sectors, as well as having a new growth capital fund for mission-aligned businesses.

What challenges arise in advising clients on their M&A strategy given the fluctuating nature of the sector?

If you are not active in the market across a significant number of assignments, it can be difficult to understand the nuances of what drives buyer behavior in various technology sectors where valuations can range from < 1x revenues to > 16x revenues. You need strong historical understanding and pattern recognition on how technology adoption cycles impact M&A. With the lack of an IPO market, consolidation of middle market companies by the tech elites and significant increases in private equity activity in the tech sector, the dynamics of what attracts various buyers and the valuations that they will pay shift regularly as well.

What have been the trends in the corporate M&A sector in the US in the past twelve months?

Over the past year, we’ve noticed that strategic acquirers are more selective and require a higher degree of strategic value to transact. The long-term trend of pursuing companies of more meaningful scale has continued, while a mix of deal consideration to ensure management continue for several years post-acquisition is also increasing.

What issues can bring a deal to a standstill? How would you overcome these?

The biggest and most common issue is missing revenue forecasts. While one can be optimistic, it is more important to have a realistic set of projections that can be delivered within a few percentage points of accuracy. The other common mistake for companies that are not well advised is not getting in front of bad news. Diligence teams are thorough and you can count on them to find any outstanding issues. Better to deal with them up front than to have a surprise as you are trying to close a transaction. Otherwise, not only will you have to deal with the issue, but you’ll also have to deal with the breakdown of trust given the lack of disclosure.

What advice would you give to a company considering a potential merger or an acquisition?

Make sure that the most likely companies to acquire you know who you are in advance through partnership or other market-based activity. The majority of transactions happen between companies that know each other in advance. It also provides you potential competitors in the sale process, as you do not want to be in a position where you are only negotiating with a single party for your acquisition.

What are the companies that Nfluence works with?

We work with expansion and growth stage companies across a number of sectors within TMT including both venture ecosystem and entrepreneurially financed. We are also excited about working with growth stage companies in the purpose economy - mission-aligned and/or impact-driven. These companies tend to have unique requirements from capital formation to acquisition and liquidity and we are spending a lot of time working in and developing this ecosystem.

About Gary Moon & Nfluence:

Spun out in 2018, Nfluence was originally founded in 2011 as the Technology, Media & Telecom (TMT) group at Headwaters MB. Gary Moon and his partners built Headwaters into a top 10 technology-focused boutique investment bank ranked by closed transactions in 2017. Over the past 12 years, Gary and the senior team at Nfluence have managed the completion of nearly 200 transactions, repeatedly demonstrating tenacity, creativity and effectiveness on behalf of their clients. Gary has been a strategic and financial adviser to numerous technology and growth firms and has extensive experience with both institutionally financed and founder financed ventures. Gary has advised on client exits to such prominent companies as AT&T, Cisco, Equifax, Microsoft, Nuance, Tyco International and WeWork, and has helped firms raise growth capital and complete private equity recapitalizations from name brand institutional investors.

Prior to joining Headwaters, Gary was the Managing Director of Europe for Ridgecrest Capital Partners, a boutique investment bank focused on technology mergers & acquisitions. In this capacity, Gary led the efforts of the firm in growing the European practice which ultimately comprised a significant percentage firm’s revenues. Prior to joining Ridgecrest, Gary led the Mobile, Wireless and Communications Technology practices for Viant Capital, a boutique investment bank in San Francisco. Prior to embarking on his advisory career, Gary was the founder and CEO of Luna Communications, a North American focused wireless systems integration firm. Luna Communications was sold to a publicly traded competitor, where Gary became the CTO and Managing Director of Client Services.

Wesbite: http://nfluencepartners.com/

Ethos Group  is one of the largest independent, privately owned and fastest growing Unified Communications businesses in the UK. Headquartered in the City of London, the specialist provider of managed print, telecommunications and IT operates in 26 countries, partnering with the leading document and telecommunications solutions providers. 

 Paul Norris, the owner and Chairman of the Ethos Group of Companies, spoke to Katina Hristova about the Group’s recent achievements and the adventure that running Ethos has been thus far. 

What has been happening with Ethos since we last spoke in October 2016? Are there any exciting projects or achievements that you’d like to share with us?

We'd just acquired LGS when we last spoke. Since then, we've successfully integrated that business and its services into Ethos and have substantially increased our digital content management and ITS capabilities, enhancing our knowledge and share of business within advertising, creative arts and media. LGS are the best business in that space bar none - we came second to them enough times to know that. We successfully combined LGS' skills in the creative and studio space with our own EMEA MPS capabilities - traditionally our core market - which was the main reason for the acquisition and a direct consequence of this was winning a global advertising brands' MPS business and bringing another several hundred devices under management within months of the acquisition. Our combined approach actually informed and changed the clients' terms of reference and neither Ethos, nor LGS, would have won this piece of business in its own right before the acquisition. So LGS has been a real success.

In June this year, we acquired RDT Office Solutions Group Limited (“RDT”), another successful and well-established MPS business with a substantial client base, predominantly in London and Europe, which further expanded our UK and EMEA Managed Print business and brought additional services and skills into portfolio.

This was Ethos’ third major managed print acquisition within 12 months, taking our annualised print business revenues and EBITDA to around £38m and £8m respectively. This year's annualised EBITDA should be c. £10m and we will take our annual contracted annuity and EBITDA to c. £25m and £14m by the end of next year.

We made a number of structural changes to the Board and Senior Management Team, appointing a new Group CFO, and ensuring we were completely fit for purpose as a larger organisation. We're a dynamic business but it has run traditionally along clear functional lines. My own role has changed from Group Managing Director to Group Chairman, predominantly so that I can focus on strategic development and growth and Barry Matthews, who has been with me since the beginning, has moved very successfully into the role of Ethos' Managing Director‎.

We've been very busy and the structural changes and improvements in particular have been a real success. It's an incredibly strong SMT.

Ethos was established in 1992 and is now one of the largest independent communication solutions companies in the UK – can you tell us a bit about the company’s journey? What are some of the key challenges that you’ve been faced with? What is the motivation that has kept you going?

Ethos’ core business was originally providing Managed Print Services, but over 25 years, it has evolved and expanded considerably and we now provide our clients with a full range of managed services across their entire communications infrastructure, including: Print Solution Services & Support; Production Print; Creative Arts; Telecommunications, ITS and UC solutions; Content Management; Audio, Video & Collaboration and Security & Compliance.

The challenge has been the fun part, the technological advancements have been enormous and have been driven by - and have in turn driven - clients' requirements and expectations, keeping ahead of those, so that we can always provide our clients with the best independent contemporary advice, has meant that we've had to continually recruit and retain the best people, skills and talent - everybody says this of course, but it's a very strong team at Ethos.

Quite simply we've always challenged ourselves to constantly change and develop in order to retain our status as a market leader. Being independent and brand agnostic has helped us to genuinely fulfil clients bespoke requirements, that's one of the reasons why our client retention rate is so high; our clients trust us to give them 'best' unbiased advice and, as we've grown and diversified and added products and services to the portfolio, they've trusted us to provide additional services to them.

Doing things as well as one can and being recognised for that and working with an incredible team of talented people who take pride in doing everything to the best of their abilities is the ongoing motivation. I always tried to recruit people who were better and brighter than me. Looking around, I think I managed that!

What does a typical day look like for you as Ethos’ Group Chairman? What daily challenges do you encounter and how do you overcome them?

If there was a typical day, I'd give up. I get to think a lot more now; I'm not saying that's necessarily a good thing, but the Board runs the business day-to-day - and does so very well - so I get to concentrate on bigger and potentially more rewarding stuff; enhancements in portfolio, scoping additional services, collaboration and evaluating potential opportunities - some of these come off and get adopted, some don't. I'm also progressively spending less time in the document business and more time in the telecoms business, so that's a 'newer' challenge which I'm enjoying. But the challenges are the same for any businessman; growing the business in every way and making money in a competitive and changing environment, whilst delivering quality and value to your clients and retaining your own quality people - and your principles. As a technology business, it's amplified because technology has changed more rapidly in the last five years than it has in the last fifty - and that will be the case in the next five - so we need to continually innovate and ensure we are absolutely on the pulse. I'm very fortunate to have some incredible technical people on board to do that.

There aren't really daily challenges now, but when there is a challenge I think: 'who can I delegate that to?' Seriously, there should be someone capable of dealing with the vast majority of things that come up.

What's your best and worst business decision and why?


 My worst and best business decision was setting up the telecoms business.

I knew absolutely nothing about it - had I known anything remotely close to what I know now, I'd have never done it. Consequently, I kissed a lot of expensive frogs and wasted a lot of time and money, but, because I'm pretty ‎strong-willed, I carried on and eventually met a great guy - Matt Hill, who is now the Managing Director of that business. With his industry and specialist knowledge, ability and contacts, and our business skills and resources, the company has become a great success, it's won lots of large scale and very valuable business, more than its fair share of awards, it operates in as many countries as the document business and employs some incredibly bright people. The business is starting to do very well indeed and I've no hesitation in saying that within four years, it will be the same size as the document business. ‎It will yet prove to be the most profitable thing I've ever done.

How do you ensure you are directing the Group in the right direction?

You can't ensure it, you just do your best and, to be honest, you make a lot of it up as you go along. I read a lot of what other people say they do, but frankly, anyone who’s telling the truth and runs a business at any level for long enough will tell you that a great deal of it is intuitive - and it should be, that's the bit you're there for. I do take it seriously, I consider the consequences of what I do, I consult the Board ‎and SMT whenever it's appropriate and I always ask 'is it the best we can do?', 'can we do it better?', 'can we do it better than anyone else?', 'can you think of a way to do it better?'. It's my job to say 'we're going over that hill' but it's a team of people who make it happen. The skill (hope) is that there's something worth going over the hill for.

What was the best advice anyone ever gave you, and did you follow it?

Winston Churchill's: "Never, never, never give up" can't be beaten. I also remember my first boss telling me: 'Always leave something for the other guy'. If you squeeze everything from the other person, he/she is hardly likely to have your interests at heart. It was good advice.

Where does Ethos stand internationally and what are the company’s goals moving forward?

Whilst the majority of Ethos’ combined customers are headquartered in the UK, we now operate, at scale and in both the document and telecoms business, in 26 countries. This is EMEA-centric admittedly, but our coverage is expanding rapidly. We manage all of our overseas clients ourselves, so there's a direct relationship with them, if it goes wrong, we fix it.

Being a communications business means we have no excuse for being unable to seamlessly provide services cross-border, so we provide the same SLA to a client in Frankfurt say, as we do in EC2.

The engagement is different for the document business, compared to the telecoms business - far more can be done remotely with the latter - and, of course, much of the portfolio is specifically geared to remote communications, work process and improvements anyway.

Culture aside, I see no difference whatsoever in relation to a client’s physical location, our job is to provide a managed service to an agreed performance level regardless of the end point.

What motivates you most about working within the Unified Communications industry?

Change, diversity and connectivity.  I'd hate to be in a static environment and the UC industry is anything but static. I'm not a technical person, so I ‎view it all as a user - Does it work? ; What’s the benefit and improvement? ; Together with 'Can we make money from selling it?’ These are the same questions I ask when we review new products or services.

The landscape is so diverse, there's so much there that corralling it into a manageable, deliverable and interconnected suite of products and services, which are capable of - and make cohesive sense in - deploying under a single managed agreement, is an exciting challenge and you do very often see businesses get it wrong. We want to enlighten and enable our clients, not baffle them.

It also always feels 'young', like there's something new and exciting just about to happen. Whilst no business is recession proof and there have been tough challenges for over the last several years, the industry is very resilient - being largely annuity-based clearly helps - but it's innovative and precipitates change in perceptions and needs, which drive desires and behaviours – something that you really need when you're trying to sell things.

If I hadn't fallen into it by chance, I'd claim it was an inspired choice.

Given the speed and complexity at which the communication needs of your clients are changing, is there anything that's particularly on your agenda at the moment?

A lot. Compliance and security are increasingly becoming a first point of engagement with clients within both the document and telecoms business. We're headquartered in the City of London, so we're well used to working with clients in relation to their regulatory considerations. We also advise clients in relation to document security and telecoms aspects of MiFID II and GDPR process requirements, we work with clients in relation to high-speed low-cost encrypted data and content storage requirements in innovative ways. Distributed working practices and international trade continue to drive technology requirements and, as businesses are no longer constrained by geographical or physical barriers, we have to reflect that in our services, capabilities and knowledge base. An example of this is our Multi-net offering, enabling clients to access all UK networks from a single SIM/ phone.

We were one of the first businesses to go to market with a hosted telephony offering and we're now layering that with additional hosted applications and services. Where it's an applicable and appropriate solution, cloud based technologies, in particular contact centre, work force optimisation tools, compliant call recording, audio/ video and collaboration tools, ‎as well as cloud based data storage, are continuing to build momentum. The move towards digitalisation continues and drives requirements around process efficiency, compliance and security‎. Our clients’ key challenges in the next 12-18 months will include the planned introduction of GDPR. You can't open your eyes without seeing that or being offered advice on it, but at Ethos we understand that technology alone can’t meet all of the proposed requirements and we’re working with clients to address their processes, procedures and the technology required to meet the challenge. We also provide government grade encrypted storage and software solutions that enable our clients to respond to and manage potentially non-compliant activity efficiently and effectively. Data growth, security and collaboration are key drivers in many businesses and this continues to influence our direction and focus. We've added complimentary technology to address these challenges. Our focus on our clients’ data, documents and content being in securing it, securing access to it, managing it and distributing it. It can appear a crowded space so we adopt and develop innovative technologies that solve multiple challenges. We don’t want to offer the same things as our competitors - we want to offer something better, different, while remaining agile in our approach and backing that up with the highest quality service and support.

How do you see the future for your competitors?

Mixed. Unfortunately, some will cease to be relevant and some will do very well. I gambled several years ago, when I set up the telecoms business, that the future of communications businesses would be the provision of all communications resources; documents, voice and data, by one service provider, eventually on a single managed service agreement, that sounds great, except if you make that your pitch then every part of it needs to be excellent. You can't excel at one part and then try and engage with the client with another that's substandard, far from making the relationship more valuable and stickier - you'll ruin it and lose the lot. But being able to consult, independently advise, and deliver different technologies at the highest level, with one single point of contact‎ and, ideally, on a single managed agreement is our objective. We're not there yet, but we're materially there with some clients, some of whom are very large Pan-European businesses, so it's possible and I genuinely think - caveated heavily as to ability - it's what clients will want.

Looking to 2018 and beyond, what is your vision for the future of Ethos? What do you hope to accomplish?

By the end of next year, Ethos' document business will be the most profitable independent business in the UK industry, easily the most proportionately profitable, so that's a 'mark' I suppose. It must, at very least, mean that we run the business well. But that's almost by default as we're growing well organically and by acquisition. What I'd like is to continue to intelligently expand our portfolio and to offer more to our existing and new clients.

However, we're very careful about what we bring into our portfolio - it has to be the best of its type and it has to add real value to us and to our clients. The problem with technology businesses is that everyone is passionate about their own offering, especially when there's an element of IP involved. Unfortunately, you can be as passionate as you want about something but, if it's rubbish, then no one is going to buy it or, if they do, they won't thank you for it and they won't deal with you again. This is why we're guarded about what gets in.

Additionally, I'd also like to further expand our client base outside the UK. That's something we're working on now and there will be further collaborations with like-minded businesses, where we can integrate services and technologies. Our ITS capability is growing at a terrific rate, which is bringing enormous new opportunities. We also have a couple of acquisitions on the horizon.

I've a particular interest in telecoms now - there's an incredible opportunity for growth and value, especially by acquisition. In fact, the opportunities for acquisition are enhanced because of the more diverse nature of that industry, and that really excites me, as does the technology that's coming along. Enhancing everything that we do and reducing cost, you'd have to be very bad indeed not to be able to capitalise on that.

Website: http://www.ethos.co.uk/

One in six small businesses (17%) is planning to employ new staff by the end of April 2017 – with the IT & Telecoms sector leading the employment charge (27%) -– according to the new research from Hitachi Capital’s quarterly British Business Barometer.

The new Hitachi Capital Business Finance data comes as the Federation of Small Businesses has urged The Chancellor of the Exchequer Philip Hammond to boost jobs and long-term growth in the forthcoming Spring Budget. The new Hitachi Capital data suggests many SMEs already plan to hire new staff before April: the areas where they could do with Government support relate to keeping fixed running costs and business rates down.

Beyond being financial growth drivers for the economy at large - and an ongoing source of ideas and innovation - the UK’s small businesses are vital drivers for employment and training to the British economy. The new research by Hitachi Capital Business Finance revealed the younger the small business the more likely it was to be hiring. One in five SME decision makers (20%) from enterprises less than five years old plan to hire new people by April. In contrast, businesses over 35 years are the least likely to be hiring (13%).

For eight of eleven regions polled, typically around one in six small ventures were planning to expand their headcount in the next three months – with London, the South East, North West and Scotland driving activity.

Regional employment over the next three months

By sector, the divergence between regions most and least likely to employ new staff were more pronounced – the biggest opportunity sectors being IT & Telecoms, Financial Services, Manufacturing and Medical.

Employment over the next three months by sector

Gavin Wraith-Carter, Managing Director at Hitachi Capital Business Finance comments: “The Spring Budget is an opportunity for the Chancellor to openly support the growth ambitions of SMEs and the positive contribution they make to the UK economy at large. Many small business owners are concerned about the impact of a steep rise in business rates and have placed importance on cutting fixed costs and better managing cashflow and invoicing to keep their business plans on track.

 “On a positive note, our Spring research suggests that many SMEs are adjusting quickly to Brexit, looking for new markets to expand into and fresh methods to drive growth – and many intend to increase headcount to support these plans. This week’s Budget is a great opportunity for the Government to reaffirm its support for the sector at a critical time.”

(Source: Hitachi Capital Business Finance)