Helsinki (AFP) – Finnish telecommunications equipment giant Nokia announced on Monday it would replace chief executive Pekka Lundmark with Justin Hotard, an American executive overseeing artificial intelligence at US chip-maker Intel. Lundmark, who has served as Nokia’s CEO since 2020, will leave his position on March 31, and Hotard will take over the next day, the company said in a statement.
The move comes as Nokia reported last month a surge in profit for 2024 after years of slumping demand for its 5G equipment from mobile network operators. “I want to move on from executive roles to work in a different capacity, such as a board professional,” said Lundmark, 61, who has led various listed companies over the past two decades. The leadership change signals that Nokia wants to ride the global AI growth wave.
Hotard, born in 1974, currently serves as executive vice president at Intel as well as general manager of its AI and data centre group. “I am excited to get started and look forward to continuing Nokia’s transformation journey to maximize its potential for growth and value creation,” Hotard said. “Networks are the backbone that power society and businesses, and enable generational technology shifts like the one we are currently experiencing in AI,” he added.
Hotard has previously held leadership roles at large technology companies for more than 25 years, including Hewlett Packard, Nokia said. Nokia chairwoman Sari Baldauf stated that Hotard holds “a strong track record of accelerating growth in technology companies along with vast expertise in AI and data centre markets, which are critical areas for Nokia’s future growth.” Baldauf cited Hotard’s knowledge of the US market as a key factor behind the appointment. “The US is an important market for us,” she said at a press conference.
The change at the top comes after Nokia posted bumper profits. In 2023, the company announced it would cut up to 14,000 jobs as profits fell on weakening demand for its 5G equipment in North America. Last month, Nokia reported an 89 percent rise in net profit for 2024, with sales surging in India and North America in the final three months of the year.
Atte Riikola, an analyst with Finnish market research firm Inderes, said Hotard’s appointment reflected that Nokia was shifting strategically by focusing on developing its network infrastructure, citing growth opportunities in data centres and AI investments. “We believe this is a valid direction, as Nokia’s longer-term growth prospects on the Mobile side clearly look more modest than Network Infrastructure,” he wrote on Inderes’ website.
Baldauf noted Lundmark had joined the company “at a difficult time in Nokia’s history” and would leave “with our highest respect.” “Under his tenure, Nokia has re-established its technology leadership in 5G radio networks and built a strong position in cloud-native core networks,” she said.
Nokia’s share price rose two percent to 4.76 euros ($4.92) on Monday in midday trading. When Lundmark took over as the company’s CEO in 2020, Nokia’s share price was at around four euros, Riikola noted. “In our view, this says more about the challenging market for mobile networks, where it is very difficult to make a sustainable return on capital,” he said.
© 2024 AFP
