The company saw a drop across all of its divisions in the latest fiscal quarter and now plans to cut costs by up to €1.2bn by the end of 2026.
Finnish telecoms company Nokia has revealed plans to cut up to 16pc of its global workforce – a total of 14,000 – over three years, after suffering a year-on-year sales drop of 20pc.
As a result of this, Nokia has announced plans to reset its cost base and position itself for longer-term growth, while navigating market uncertainty. The company plans to give its business groups more operational autonomy so they can better address opportunities.
The company plans to reduce its cost base by between €800m and €1.2bn by the end of 2026. This strategy is expected to reduce the workforce to between 72,000 and 77,000 staff, compared to the current workforce of 86,000. Nokia has an office in Dublin, which as of 2020 had a staff of 115 people. It is not known if these staff will be affected by the layoffs.
“The most difficult business decisions to make are the ones that impact our people,” said Nokia CEO and president Pekka Lundmark. “We have immensely talented employees at Nokia and we will support everyone that is 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.”
The company plans to act quickly on its cost-cutting programme, with a target of at least €400m in savings in 2024 and €300m in 2025. Nokia said the cost savings are expected to primarily take place in its mobile networks, cloud and network services, and corporate divisions.
Nokia’s net sales total for the third quarter of 2023 was €4.98bn, compared to more than €6.24bn in the same period last year. All aspects of the company’s operations saw a drop in sales, with its cloud and network services division falling the least at 7pc. The company’s operating profit dropped by more than 50pc.
“We continue to believe in the mid- to long-term attractiveness of our markets,” Lundmark said. “Cloud computing and AI revolutions will not materialise without significant investments in networks that have vastly improved capabilities.
“However, while the timing of the market recovery is uncertain, we are not standing still but taking decisive action on three levels: strategic, operational and cost.”
Earlier this week, a number of tech companies announced upcoming layoffs, including LinkedIn which plans to reduce its global staff by roughly 668.
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