Nokia to cut as many as 14,000 jobs as profit drops by 69%

Nokia on Thursday set out plans to cut its workforce by up to 14,000 as it reported a steep drop in third-quarter profit. The telecom equipment maker said it’s looking to reduce its workforce to between 72,000 and 77,000 workers, from 86,000 now, by the end of 2026. Nokia said that could save the company as much as €1.2 billion ($1.3 billion), or up to 15% of personnel expenses. “We continue to believe in the mid to long term attractiveness of our markets. Cloud Computing and AI revolutions will not materialise without significant investments in networks that have vastly improved capabilities. However, given the uncertain timing of the market recovery, we are now taking decisive action on three levels: strategic, operational and cost. I believe these actions will make us stronger and deliver significant value for our shareholders,” said Pekka Lundmark, president and chief executive, in a statement.

The company didn’t provide a regional breakdown of the job cuts but said it will “act quickly” as it targeted mobile networks, cloud and network services, as well as its corporate function, for cuts. Nokia’s profit dropped by 69% to €133 million, or 2 cents a share, as revenue fell 20% to €4.98 billion. Analysts polled by Visible Alpha forecast earnings of €395 million on revenue of €5.66 billion. Nokia shares dropped 8% in Helsinki trade. In echoes of what rival Ericsson said on Tuesday, Nokia said a slowdown in India’s 5G deployment could not offset the situation in North America. Nokia said it’s tracking toward the lower end of its net sales range for 2023 and toward the mid-point of its comparable operating margin range. On a conference call, Lundmark said there was still too much uncertainty heading into next year. And he said operators are having a hard time making money off the latest technology, 5G. “A key reason why operators have been hesitant with their investments has been that their 5G monetisation has been slower than expected. And the reason for that has been that it has been difficult for them to introduce new applications that would take advantage of the capabilities of 5G,” he said. MarketWatch