The Finnish Telecommunication company Nokia plans to cut massive jobs to around 14,000 jobs to lower its costs. Major jobs cut-off come after a 20% sales drop in the third quarter year-on-year to 4.98 billion euros. Over the time period, the 69% profit rate has fallen to 133 million euros.
Nokia is reportedly planning to cut a large number of jobs due to its reduced investment in 5G infrastructure by US and European operators.
Nokia Corporation Interim Report for Q3 2023
Nokia confirms the job cuts but doesn’t disclose the exact number. The company said in a statement that planned cut-offs show a 10% to 15% reduction in personnel expenses. These job cuts are expected to save up to €421 million for the next year and an additional €300 million in 2025 year.
Chief Executive of Nokia, Pekka Lundmark that the firm has taken the decision as part of a cost-cutting plan following the third quarter earnings that reduced. It will save 1.04 billion euros for the company. He said firms have to make the most difficult business decisions as they have immensely talented employees. They will support everyone who is affected by this process.
Finnish tech company posted weaker-than-expected earnings earlier this month. Lundmark also released the statement that Nokia is tracking toward the lower end of the net sales range for the year 2023. And towards the midpoint of the comparable operating margin range. He told in an interview with Reuters that the net sales of the firm are 40% down in the third quarter.
Pekka also painted a gloomy picture for the second half of the year when Nokia firm downgraded the annual guidance in the month of July.
After the second quarter, Nokia cut its annual guidance for sales from 23.2 billion euros to 24.6 billion euros. It has a comparable operating margin in a range of 11.5% to 13%. The top end of this range had been previously seen at 14%.
5G equipment makers are struggling as US and European Union Operators. They seek to cut capital expenditures and adjust their inventories.
Swedish multinational networking and telecommunications, Erricson posted a disappointing outlook this week. It said market weakness will persist into the fourth quarter and beyond.
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