Nokia, a Finnish telecommunications equipment company, has announced its intention to reduce its workforce in order to cut costs and achieve financial stability. The decision is being made in response to a 20% drop in third-quarter sales. This was primarily due to a slowdown in 5G equipment sales in regions such as North America.
As part of an effort to streamline operations and reduce spending, the company plans to cut up to 14,000 jobs. According to a company statement, the cost-cutting initiative is expected to result in a more streamlined workforce, reducing the current 86,000 employees to between 72,000 and 77,000.
This cost-cutting strategy is part of Nokia’s efforts to achieve its long-term goal of achieving a minimum comparable operating margin of 14% by 2026. It is hoped that this initiative will help the company gain immediate benefits, with a savings target of at least €400 million for the current year and an additional €300 million in 2025.
Despite the ongoing uncertainty, the company’s top management remains optimistic about the possibility of a positive change. In a statement to the media, Nokia CEO Pekka Lundmark expressed confidence that the upcoming fourth quarter will see a significant improvement.
He stressed the importance of resetting the cost structure in order to adapt to market uncertainties and ensure the company’s long-term profitability and competitiveness.