Nokia is reducing its presence in China as the Finnish telecommunications equipment company prepares to close its radio technology research and development centre in Hangzhou by the end of 2026. The closure is expected to affect approximately 1,600 jobs and represents another significant step in the company's restructuring of its China operations.
Nokia confirmed the Hangzhou closure after reports about the planned shutdown emerged in August. The company said its China business has steadily declined over the past several years and that it is adjusting its operational footprint to better align with Nokia's global way of working.
The Hangzhou facility is involved in radio technology research and development, an area closely connected to Nokia's mobile network equipment business. The planned closure therefore affects a technical and engineering operation rather than being limited to a conventional administrative office.
The decision comes after several years of declining business for Nokia in China. The company has faced increasing competition from domestic telecommunications equipment manufacturers, while its ability to secure major network contracts in the Chinese market has weakened.
Nokia's Greater China workforce has also declined substantially. According to Light Reading, Nokia employed about 13,700 people across Greater China in 2020. By 2025, that figure had fallen to approximately 7,200. The decline has occurred alongside broader restructuring across Nokia's global workforce.
Nokia's China strategy has also changed following its decision to take full control of Nokia Shanghai Bell. The company previously operated the business as a joint venture with China Huaxin. Nokia completed the takeover in late 2025, giving it full control of the Chinese operation.
The restructuring is also reflected in Nokia's financial guidance. When reporting its second quarter results in July 2026, Nokia increased its expected restructuring charges for the year from approximately 250 million euros to 800 million euros. Light Reading reported that about 350 million euros of the restructuring costs were connected to the China overhaul.
Nokia has said that integrating its China operations into its global structure is expected to produce cost savings. The company is also carrying out restructuring in other regions as it seeks to improve productivity and reduce costs.
The Hangzhou announcement has attracted additional attention because of comments made by Nokia President and CEO Justin Hotard in September 2025. During a press event in Oulu, Finland, Hotard questioned the different market access conditions faced by European and Chinese telecommunications equipment companies.
Hotard asked why Europe allowed what Nokia describes as high risk vendors in European networks when Nokia had a market share of less than 3 percent in China. His remarks highlighted Nokia's concerns about the imbalance between European access to Chinese telecom markets and the presence of Chinese equipment suppliers in European markets.
Nokia executives had also said at the time that the company had received indications that European telecom equipment suppliers could be excluded from Chinese tenders for national security reasons. These statements formed part of a broader discussion about the increasing role of national security considerations in telecommunications infrastructure.
The latest Hangzhou closure does not by itself establish that the facility is being closed specifically because of those earlier concerns. Nokia's official explanation focuses on the decline of its China business and the need to align its operations with its global model. This distinction is important when assessing the reasons behind the restructuring.
Reports have also indicated that Nokia may reduce or close operations at other locations in China, including sites in Beijing, Chengdu, Qingdao and Shanghai. However, these additional changes have not been confirmed by Nokia in the same way as the Hangzhou facility closure.
The broader reduction in Nokia's Chinese operations comes against a changing global telecommunications landscape. Chinese companies such as Huawei and ZTE have become major suppliers in China's domestic telecom market, while European companies such as Nokia and Ericsson continue to compete internationally.
The situation is particularly important for the development of future mobile network technologies. China has built one of the world's largest 5G network infrastructures, creating a major domestic market for network equipment suppliers. Nokia and Ericsson have faced difficulties maintaining their previous positions in that market as Chinese operators have increasingly relied on domestic vendors.
According to Light Reading, Nokia's Greater China revenue fell from nearly 2.2 billion euros in 2018 to approximately 913 million euros in 2025. The figures illustrate the scale of the company's declining business in the region over that period.
Nokia is not the only European telecom equipment manufacturer facing challenges in China. Swedish rival Ericsson has also experienced a substantial decline in its Chinese business and has reduced its local workforce. Both companies have been affected by changes in procurement patterns and the wider geopolitical environment surrounding telecommunications technology.
The reduction of research and development activity in China could also have implications for the relationship between global telecom companies and the Chinese technology ecosystem. Research centres can provide companies with access to engineering talent, local technical expertise and market-specific knowledge.
At the same time, Nokia continues to invest heavily in research and development globally. Light Reading reported that Nokia spent approximately 4.9 billion euros on research and development in 2025, with first-half 2026 R&D spending also increasing compared with the previous year.
The company is therefore not ending its research and development activities altogether. Instead, the current changes indicate a reorganisation of where those activities are carried out and how Nokia manages its operations in different markets.
The development also comes as telecommunications companies prepare for the next generation of mobile technology. Discussions around 6G are already underway, while artificial intelligence is increasingly being integrated into network management, radio access networks and cloud infrastructure.
The restructuring of Nokia's China operations could become part of a wider trend toward more geographically separated technology supply chains. Governments in several regions have increasingly linked telecommunications infrastructure with national security and strategic technology policies.
For Nokia, however, the immediate issue is the continued decline of its China business. The Hangzhou closure is expected to be completed by the end of 2026, with approximately 1,600 positions affected.
The company's explanation remains focused on commercial conditions and operational alignment. Nokia has said its business in China has declined steadily and that it is adjusting its footprint accordingly.
The earlier comments from Hotard provide additional context about the difficulties faced by European telecom equipment manufacturers in China, but they should not be treated as a direct statement that the Hangzhou facility closure was caused by any single geopolitical decision.
As Nokia proceeds with the restructuring, the company's future presence in mainland China is likely to be significantly smaller than it was during the earlier stages of the 5G rollout. The changes also highlight how telecommunications has become increasingly connected to questions surrounding market access, national security and technology supply chains.
The Hangzhou R&D centre closure is therefore more than a local workforce reduction. It is part of Nokia's broader restructuring of its China operations at a time when the global telecommunications industry is undergoing significant technological and geopolitical changes.