Nokia to Start “Strategic Review” of its Digital Health Business

Finnish network gear maker Nokia has started a strategic review of its digital health business and announced more than 400 job cuts in its home country.

The Finnish tech company announced on Thursday that it would be initiating a "strategic review" of its digital health business, which includes smartwatches and fitness trackers, as well as smart scales.

“Nokia today announces that it has initiated a review of strategic options for its Digital Health business,” the company said in the statement.

“The strategic review of the Digital Health business may or may not result in any transaction or other changes. Any further announcements about the Digital Health business will be made if and when appropriate.”

While Nokia said the review may not result in any changes, it's a worrying sign nonetheless for Nokia's wearable business.

Digital health, part of Nokia Technologies unit, is one of the areas where the company had been looking for growth opportunities amid a tough market for its mainstay telecom network gear business.

The Finnish company said its ‍patent business, brand partnerships and technology licensing units are not in the scope of the review​.

Nokia began expanding its digital health offerings in 2016 when it bought Withings— a French company that made fitness trackers and smart bathroom scales — for $191 million in cash. Withings was then folded into Nokia and renamed Digital Health.

But the business hasn't seemed to take off. In the third quarter of 2017, Nokia wrote down more than $175 million of goodwill on the business, and Nokia plans to cut more than 400 jobs in Finland this year.

The company also said it will cut up to 425 jobs this year in its home country Finland.

The reductions are part of a 1.2 billion euro ($1.3 billion) global cost-savings plan which was announced after its 2016 acquisition of Franco-American rival Alcatel-Lucent. Nokia currently employs 6,300 people in Finland and around 102,800 globally.

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