Finnish telecommunications group Nokia will lay off 10,000 workers over the next two years in an effort to cut costs

Updated on October 20, 2023 View Times: 781

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Nokia announced on October 19 that it will adjust its operating strategy, aiming to reduce its total cost base by 800 million to 1.2 billion euros by the end of 2026 compared with 2023, which means that personnel expenses will be reduced by 10%-15%. Nokia currently has 86,000 employees, and the plan is expected to bring Nokia's workforce down to 72,000-77,000. Nokia's third quarter report on the same day showed that net sales in the third quarter were 4.98 billion euros, estimated at 5.7 billion euros, and adjusted operating profit in the third quarter was 424 million euros, estimated at 556.4 million euros.

Pekka Lundmark, Chief Executive Officer of Nokia, said: "While our net sales in the third quarter were impacted by ongoing uncertainty, we expect a more normal seasonal improvement in our Networks business in the fourth quarter. ”

Nokia's quarterly comparable net sales fell below market expectations to €4.98 billion from €6.24 billion last year.

Nokia said it will shift to a leaner corporate hub to strengthen its strategic focus while securing R&D spending and giving its business units more operational autonomy.

Pekka Lundmark said, "Replacing the cost basis is a necessary step to adapt to market uncertainty and ensure our long-term profitability and competitiveness. ”

Nokia used to be the world's largest mobile phone maker, but with the advent of smartphones, it was left far behind by competitors such as Apple and Samsung. In 2013, Microsoft announced the acquisition of Nokia's mobile phone manufacturing business for 5.44 billion euros, after which Nokia focused on telecommunications equipment. In 2020, due to Huawei's unreasonable suppression by the United States and blocked from entering the UK 5G market, British Telecom (BT) then reached an agreement with Nokia, and Nokia became the UK's largest hardware equipment supplier. But 5G equipment makers have been in trouble as telecom operators in the U.S. and the European Union cut spending.

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