NOKIA REDUCING THE MANPOWER
Nokia, a Finnish telecom giant and a major player in the 5G equipment market, is set to make substantial cuts to its workforce, eliminating up to 14,000 jobs. This move is part of a comprehensive cost-cutting effort aimed at addressing what the company describes as a “weaker” market environment. Despite employing 86,000 individuals, Nokia has decided to initiate this restructuring, which will ultimately reduce its workforce to a range between 72,000 and 77,000.
The primary objective of this strategic maneuver is to reduce staffing-related expenses by 10% to 15%, providing the company with substantial savings. Caompany anticipates that this initiative will save at least €400 million (approximately $421.4 million) in the year 2024 alone. The bigger picture reveals that these workforce reductions are projected to significantly lower Nokia’s costs, with cumulative savings of up to €1.2 billion (nearly $1.3 billion) expected by the conclusion of 2026. company, represented by the stock symbol NOK, has expressed its commitment to swift action in executing these changes.
In a statement, company CEO, Pekka Lundmark, acknowledged the profound impact of these decisions on the workforce, emphasizing that the most challenging business choices are those that directly affect the company’s employees. He conveyed his admiration for the immense talent within company and pledged support for all those who may be affected by the ongoing process.
Coinciding with this announcement, company reported financial results that fell below expectations. The company revealed that its sales in the third quarter had declined by 15% compared to the same period in the previous year. Nokia attributed this decline to “macroeconomic uncertainty and higher interest rates,” which have continued to exert pressure on operator spending.
Furthermore, Nokia disclosed that mobile network sales had decreased by 19% during the third quarter compared to the preceding year. This drop was primarily attributed to the slowdown in 5G deployment in markets like India.
Swedish competitor Ericsson also shared concerns about the economic environment, echoing Nokia’s sentiment of facing a “challenging environment and macroeconomic uncertainty.” Ericsson recently warned that its second-half 2023 sales are likely to fall below the usual expectations.
Despite the challenges faced by Nokia and its industry peers, the company has maintained its outlook for 2023. Nokia’s full-year sales forecast ranges between €23.2 billion and €24.6 billion (equivalent to $24.4 billion and $25.9 billion). Pekka Lundmark, Nokia’s CEO, expressed his continued belief in the mid to long-term appeal of their markets, emphasizing their commitment to navigating the hurdles and uncertainties they currently face