Finnish telecommunications equipment group, Nokia, announced on Thursday that it plans to slash up to 14 000 jobs. This decision comes in the wake of a 20% drop in third-quarter sales due to slowing sales of 5G equipment in markets such as North America.
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New Cost-Savings Plan
In an effort to counteract these losses, Nokia is implementing a new cost-savings plan. The company aims to save between €800 million and €1.2 billion by 2026. This initiative is part of Nokia’s strategy to achieve its long-term comparable operating margin plan of at least 14% by 2026.
Nokia to slash up to 14 000 jobs
The cost-savings program is expected to reduce the number of employees in the organization from the current 86,000 to between 72,000 and 77,000, according to a statement released by the company.
Nokia plans to act swiftly on this program, with at least €400 million of savings expected in 2024 and an additional €300 million in 2025.
The company reported that comparable net sales fell to €4.98 billion from €6.24 billion last year, falling short of the estimated €5.67 billion according to a LSEG poll.
CEO’s Statement
Despite the impact on third-quarter net sales due to ongoing uncertainty, CEO Pekka Lundmark expressed optimism about the future. He anticipates a more normal seasonal improvement in Nokia’s network businesses in the fourth quarter.