2023-10-19 06:49:42
The Finnish telecommunications giant announced its decision to cut up to 14,000 jobs following a 20% drop in sales in the third quarter.
A savings plan of rare magnitude. Finnish telecommunications equipment group Nokia said on Thursday it would cut up to 14,000 jobs as part of a new cost-cutting plan as its third-quarter sales fell 20 percent due to a slowdown in sales of 5G equipment in markets such as North America.
The company is targeting between €800 million and €1.2 billion in cost savings by 2026, in order to achieve its long-term operating margin target of at least 14% by this horizon.
The savings program is expected to lead to an organization employing 72,000 to 77,000 employees compared to Nokia’s 86,000 employees today, the company said. “Nokia plans to move quickly on the program with at least €400 million in year-to-date savings in 2024 and a further €300 million in 2025», added the company.
A slowdown in demand for 5G equipment
In the third quarter, comparable net sales fell to 4.98 billion euros from 6.24 billion euros a year earlier and a forecast of 5.67 billion euros according to analysts surveyed by LSEG.
«Third quarter net revenue was impacted by the current uncertainty, but we expect a more normal seasonal improvement in our network business in the fourth quartersaid general manager Pekka Lundmark. “We saw some slowdown in the pace of 5G deployment in India, meaning growth there was no longer sufficient to offset the slowdown in North America», added the manager.
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