In yet another mass layoff announcement this week, the Finnish telecom giant reveals it will cut up to 14,000 jobs by 2026
by Rina Hoffman
October 20, 2023
Earlier this week, Rolls-Royce and LinkedIn announced that they are cutting 6% and 3% of their global workforces, respectively. On October 19, Nokia revealed it is taking the same path.
In a move to counter a significant drop in profits and demand for its products, the Finnish telecom giant announced plans to cut between 9,000 and 14,000 jobs over the next three years. With a global workforce of 86,000 people, the cuts would affect 16% of Nokia’s employees.
Headquartered in Finland, the company has 37,700 employees in Europe and about 10,500 in the United States. It has not yet disclosed the specific locations where job cuts will be made.
Why is Nokia cutting its workforce?
The move comes in the wake of a dismal third-quarter performance, in which the company reported a 20% decrease in sales compared to quarter three of last year. This drop in sales has translated into a staggering 70% decline in profits — from €428 million in Q3 of 2022 to €133 million in Q3 of 2023.
The company now expects to see a 9% decline in demand this year, 7% more than it previously expected. It says the cuts are part of a strategy to reduce costs by €1.2 billion by the end of 2026.
The pace at which Nokia will cut costs will depend on the demand, the company said, adding however that it plans to save €400m in 2024 and €300m in 2025.
“The most difficult business decisions to make are the ones that impact our people, “Nokia CEO Pekka Lundmark said. “We have immensely talented employees at Nokia, and we will support everyone affected by this process.”
“Resetting the cost base is a necessary step to adjust to market uncertainty and to secure our long-term profitability and competitiveness. We remain confident about opportunities ahead of us,” Lundmark added.
Nokia’s cost-cutting measures align with similar actions taken by Verizon and AT&T in the United States earlier this year as well as with those by Ericsson.
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This article was originally published on IMPAKTER. Read the original article.