Finnish telecom giant Nokia has announced plans to cut up to 14,000 workers in a bid to reduce costs after reporting a 69% drop in earnings for the third quarter. The company’s sales between July and September fell by 20% compared to the same period last year to €4.98 billion ($5.26 billion), and profits plunged by 69% to €133 million.
The decision to cut jobs comes in response to the challenging market environment that Nokia is facing. The company aims to lower its cost base by between €800 million and €1.2 billion by the end of 2026 and increase operational efficiency.
Nokia plans to reduce its workforce from the current 86,000 employees to between 72,000 and 77,000. The locations and departments affected by the job cuts have not been specified, but Nokia says that Europe, the UK, and the US are likely to be impacted.
CEO Pekka Lundmark acknowledged the difficulty of the decision, stating, “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 extent of the cost-cutting program will depend on the demand for Nokia’s products. The company expects to save as much as €400 million in 2023 and another €300 million in 2025. Lundmark emphasized the need for proactive action, saying, “We continue to believe in the mid-to-long-term market, but we are not going to sit and wait and pray that the market will recover anytime soon. We simply don’t know when it will recover.”
Nokia’s shares fell by over 6% following the announcement.
While Nokia experiences financial challenges, it remains committed to the future of its business. The company believes in the long-term potential of the market and is taking steps to ensure its sustainability. However, with the uncertain market conditions, Nokia is taking a proactive approach to cost reduction and efficiency improvements.
The telecommunications industry is highly competitive and constantly evolving. Nokia faces intense competition from other global players in the market, as well as emerging technologies and changing consumer preferences. These factors contribute to the challenging environment the company currently faces.
The job cuts at Nokia highlight the difficult decisions that companies have to make in order to navigate turbulent times. Nokia is focused on supporting its employees affected by the cuts and is working towards a more efficient and cost-effective future.
With the global economy still recovering from the impact of the COVID-19 pandemic, many companies are facing challenges and making tough choices to ensure their survival. Nokia’s cost reduction plan is just one example of the steps companies are taking to adapt to the current business landscape.
As Nokia moves forward with its cost reduction plan, it remains to be seen how the market will respond and whether the company can successfully navigate these challenges. In the meantime, Nokia is committed to supporting its employees and managing the impact of the job cuts as it works towards a more sustainable future.
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