Nokia Shares Plunge Over 3% on Restructuring and Layoffs: Can It Hold the $10 Level?

TradingKey - Nokia slashes its Hangzhou R&D center and lays off 1,600 employees, sending its stock price tumbling over 3% and putting the $10 level at risk.

On August 18 ET, Nokia, the world's second-largest telecom equipment manufacturer (NOK), saw its stock price head lower in U.S. pre-market trading, falling over 3% to trade at $10.43. On the news front, market rumors swirled that Nokia plans to close its R&D center in Hangzhou while laying off around 1,600 employees, implying near-term severance expenses, restructuring costs, and business transition uncertainty, which have placed downward pressure on the stock price in the short term.

Reportedly, Nokia is undertaking large-scale organizational restructuring and layoffs globally this year. High severance compensation and disposal costs are projected to generate up to 800 million euros (approximately $870 million) in restructuring charges and 700 million to 800 million euros in cash outflows in 2026, directly dragging down its nominal operating profit.

Even more critically, major global telecom operators such as AT&T and Verizon have entered a maintenance period following the peak of early 5G base station deployment. Slowing growth in orders for traditional wireless network equipment has forced Nokia to transition from a traditional telecom equipment vendor into a supplier of high-speed optical networking and IP routing equipment for AI data centers.

U.S. President Donald Trump publicly voiced support on June 24 this year for Nokia's $30 million semiconductor investment plan, spurring a 3% stock price rebound, but this still failed to reverse the downward trend. Since surging on June 3, Nokia's stock price continuously fell from its high above $17 to a low near $8 in late July, dropping over 50% cumulatively. Entering August, Nokia's stock price rebounded by a cumulative 25%, narrowing the decline.

Nokia stock price chart, Source: TradingView

For both bulls and bears, $10 is not only a psychological barrier, but also a key technical support level. If this level holds, $10 can be established as a strong support line, opening up technical room to rally toward $12 to above $15. However, if it fails to hold this level, the stock will retest the $8 low for a second time.

Reportedly, Nokia's AI & Cloud division recorded single-quarter orders of 2.8 billion euros, with related sales doubling year-over-year, making it the strongest growth engine offsetting the decline in traditional 5G business. In addition, Nokia holds nearly $4 billion in net cash reserves. Combined with ongoing share buybacks and steady dividend payments, this provides a solid defensive foundation for the stock price, giving bulls the confidence to hold the $10 level.