Nokia to Cut Up to 14,000 Jobs
In response to a challenging market environment, Nokia has announced a significant cost-cutting drive, including slashing up to 14,000 jobs. This restructuring initiative aims to address a “weaker” market and lower the company’s headcount from its current 86,000 employees to a range between 72,000 and 77,000.
This move is expected to reduce staffing costs by 10% to 15% and generate cost savings of at least €400 million ($421.4 million) in 2024 alone, according to Nokia’s projections. Cumulatively, these job reductions are anticipated to trim Nokia’s costs by up to €1.2 billion (nearly $1.3 billion) by the end of 2026. Nokia has expressed its intention to “act quickly” to implement these changes.
Nokia’s CEO, Pekka Lundmark, acknowledged the difficulty of such decisions, saying, “The most difficult business decisions to make are the ones that impact our people. We have immensely talented employees at Nokia, and we will support everyone that is affected by this process.”
The announcement coincided with Nokia’s report of worse-than-expected results for the third quarter. The company revealed a 15% decrease in sales compared to the same period in the previous year, attributing this decline to “macroeconomic uncertainty and higher interest rates continuing to pressure operator spending.”
Specifically, mobile network sales plummeted by 19% in the third quarter compared to the previous year due to a slowdown in the pace of 5G deployment in markets like India.
Nokia’s competitor, Ericsson, also expressed concerns about the second half of 2023, suggesting that sales might be lower than usual due to a “challenging environment and macroeconomic uncertainty,” echoing Nokia’s sentiments.
Nevertheless, Nokia maintained its 2023 outlook, forecasting sales between €23.2 billion and €24.6 billion ($24.4 billion and $25.9 billion) for the full year.
“We continue to believe in the mid to long-term attractiveness of our markets,” Lundmark affirmed.
