Nokia slashes up to 14,000 jobs as revenues and profits tank
Nokia said it is axeing up to 14,000 jobs in a cost-cutting drive after reporting a dive in profits and revenues in the third quarter.
The Finnish technology giant is chopping the number of employees from 86,000 down to between 72,000 and 77,000 over the next three years in order to “address the challenging market environment”, it said.
It is aiming to achieve cost savings in the range of €800m (about £695m) and €1.2bn by 2026.
Nokia posted a 20 per cent year-on-year decline in sales to €4.98bn (£4.3bn) due to “macroeconomic uncertainty” and the continued pressure of higher interest rates on spending. Profit plummeted 69 per cent year-on-year to €133m (£115.6m).
Shares in the telecoms giant dropped by more than 1.8 per cent on Thursday morning.
“While the timing of the market recovery is uncertain, we are not standing still but taking decisive action on three levels: strategic, operational and cost,” said Nokia chief, Pekka Lundmark.
“First, we are accelerating our strategy execution by giving business groups more operational autonomy. Second, we are streamlining our operating model by embedding sales teams into the business groups and third, we are resetting our cost-base to protect profitability,” she explained.
Nokia maintained full-year sales expectations of between €23.2bn and €24.6bn, provided some outstanding deals in its technology division are sealed.
“I remain confident in the fundamental drivers of our business,” Lundmark said.
“Data traffic growth continues, the 5G rollout is still only around 25% complete, excluding China, and networks will continued investment. Cloud computing and AI revolutions will not happen without significant investment in networks that have vastly improved capabilities.”
Nokia’s rival Ericsson reported a decline in revenue this week, after it announced earlier this year it was slashing 8,500 jobs to save cash.