Nokia to Cut 14,000 Jobs Globally Following Significant Sales Drop
Faced with significant sales drop, Nokia plans to cut up to 14,000 jobs to boost operational efficiency and mitigate losses. Nokia, the world's largest telecom equipment manufacturer, plans to cut up to 14,000 jobs globally, affecting about 16% of its workforce. The move is part of a strategy to reduce its expenses by approximately 800 million euros (equivalent to $843 billion) to 1.2 billion euros by the end of 2026. This move is expected to lead to a reduction in Nokia's workforce, with the employee count expected to decrease to between 72,000 and 77,000 over the defined period. Despite significant sales drop in the third quarter and an attempt to mitigate financial losses, Nokia CEO Pekka Lundmark remains committed to taking decisive actions to bolster the company's standing and deliver substantial shareholder value.
Published : 2 years ago by Suzanne Elly in Tech
Nokia, the globally renowned telecom equipment manufacturer, revealed on Thursday its plan to slash up to 14,000 jobs worldwide. This decision, affecting about 16% of its current workforce, was made in light of a significant sales drop in the third quarter and an effort to mitigate financial losses.
Based in Finland and specializing in both wireless and fixed-network equipment provision, Nokia views these anticipated layoffs as a strategic maneuver aimed at consolidating its cost base while enhancing operational efficiency amid the prevailing market uncertainties.
With a long-term vision to curtail its expenses by approximately 800 million euros (equivalent to $843 billion) to 1.2 billion euros by the conclusion of 2026, Nokia expects this move will lead to a reduction in its workforce. Currently employing 86,000 individuals, it foresees its employee count dwindling to a number ranging between 72,000 and 77,000 over the defined period.
In the third quarter, Nokia’s sales suffered a significant dip of 20%, registering 4.98 billion euros against 6.24 billion previously in the same phase last year. Equally impactful was the adverse profit situation, which shrank to 299 million euros from 551 million in a span from July to September, compared to the previous year.
The company’s chief revenue contributor, its mobile networks division, witnessed a revenue decline of 24% to 2.16 billion euros. Factors contributing to this include a significant weakness in the North American market, culminating in a 64% fall in the operating profit for the division.
Despite market adversity, Nokia CEO Pekka Lundmark expressed resilience in a statement, asserting, “We continue to believe in the mid- to long-term attractiveness of our markets. Cloud computing and AI revolutions will not materialize without significant investments in networks that have vastly improved capabilities.”
Lundmark added that while the market improvement timeline may be indefinite, Nokia is committed to taking decisive actions strategically, operationally, and cost-wise. He believes such actions are essential to bolster the company’s standing and deliver substantial shareholder value.
In the competitive sphere of broadband technology, particularly within the novel realm of 5G, Nokia holds its fort as one of the principal suppliers alongside international peers like Sweden’s Ericsson, China’s Huawei, and South Korea’s Samsung.
In a comparable development earlier this year, Ericsson trimmed 8% of its worldwide workforce in a bid to downsize operations and reduce expenditures.
Topics: Nokia