Finnish telecommunications giant Nokia is set to implement a significant cost-cutting measure, targeting the reduction of 9,000 to 14,000 jobs by the end of 2026. The move comes as Nokia reported a 20% decline in sales during the period between July and September, attributing the downturn to sluggish demand for 5G equipment in markets like North America.
With a current global workforce of 86,000 employees, Nokia aims to streamline operations and enhance financial efficiency by slashing costs between €800 million and €1.2 billion (£695 million-£1 billion) by 2026. The company has been undergoing workforce adjustments since 2015, reflecting its commitment to adapt to market dynamics.
Nokia’s strategic decision is motivated by the evolving landscape of cloud computing and artificial intelligence, necessitating substantial investments in networks with enhanced capabilities. Chief Executive Pekka Lundmark emphasized the need for significant actions in the face of market uncertainties, stating, “However, given the uncertain timing of the market recovery, we are now taking decisive action.”
The cost-cutting plan outlines a proactive approach, intending to achieve a reduction of €400 million in 2024 and an additional €300 million in 2025. Lundmark remains optimistic, expressing expectations for an improvement in the network businesses in the current quarter despite ongoing uncertainties.
As Nokia repositions itself in the dynamic technology landscape, the company’s focus on strategic cost reductions and future-ready investments aims to navigate the challenges and uncertainties prevalent in the market. Stay tuned for updates on Nokia’s transformative journey as it strives to achieve enhanced financial resilience and sustained growth.