Nokia To Cut Up To 14,000 Jobs After Sales Drop 20%
by upasana sarbajna Job & Career 19 October 2023
The gear group of the Finnish telecom Nokia, on Thursday, announced that it will be cutting up to 14,000 jobs. It is a part of their new cost-saving plan after the 20% sales drop of the third quarter due to the slowing down of sales of their 5G tools in the North American markets.
The company has targeted between 800 million to 1.2 billion euros for its cost-saving plan within 2026 as it is seeking to get back on track to deliver its long-term comparable functioning margin plan of a minimum of 14% by 2026.
The program is hoped to head to a 72,000 to 77,000-employee company in comparison to the 86,000 employees that Nokia has to this day, the company mentioned in a statement.
“Nokia expects to act quickly on the program with at least 400 million euros of in-year savings in 2024 and a further 300 million euros in 2025,” the company further added.
The comparable net sales dropped to 4.98 billion euros from 6.24 billion in the previous year, missing the estimation of 5.67 billion euros as per an LSEG poll.
“While our third quarter net sales were impacted by the ongoing uncertainty, we expect to see a more normal seasonal improvement in our network businesses in the fourth quarter,” Pekka Lundmark, the Chief Executive, said.
“Mobile Networks net sales declined 19 percent as we saw some moderation in the pace of 5G deployment in India which meant the growth there was no longer enough to offset the slowdown in North America,” he went on adding.
Nokia will be moving to a thinner corporate center, which is to provide a strategic oversight and guidelines while at the same time protecting the spending on their research and development and providing the business units more opportunities for autonomous operation.
While the program will be delivering savings, the length of the one will ultimately be depending on the inflation costs. “Resetting the cost-base is a necessary step to adjust to market uncertainty and to secure our long-term profitability and competitiveness,” Lundmark says.