Sales Fall, Nokia Plans to Cut 14,000 Workers
Finnish telecommunications equipment group, Nokia on Thursday (10/19/2023) said due to the effect of falling sales, Nokia plans to cut 14,000 workers.
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| (Photo: GETTY IMAGES) |
This comes in a cost-reduction effort after third-quarter sales fell by a fifth, which was caused by sales of next-generation 5G equipment.
Nokia aims to save between 800 million euros ($842 million) and 1.2 billion euros by 2026
Nokia and rival Ericsson have been grappling with slowing demand for 5G equipment in countries such as the United States, trying to offset some weakness with higher sales to India, a low-margin market.
Nokia is targeting savings of between 800 million euros ($842 million) and 1.2 billion euros by 2026, the deadline used to realize a comparable long-term operating margin plan of at least 14 percent.
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The program is expected to result in an organization with 72,000 to 77,000 employees, down from 86,000 employees currently, the company said.
"Nokia hopes to act quickly on the programme, with at least 400 million euros of savings per year by 2024, and a further 300 million euros by 2025," he added.
Ericsson, which has also laid off thousands of employees this year, said the uncertainty affecting its business would continue into 2024.
"Although our third-quarter net sales were impacted by ongoing uncertainty, we expect to see a more normal seasonal increase in our network business in the fourth quarter," Chief Exe said.