Hong Kong CNN –
Nokia will cut up to 14,000 jobs in a sweeping cost-cutting move to address a “weaker” market environment, it said in a statement on Thursday.
The Finnish telecommunications giant, a major provider of 5G equipment that employs 86,000 people, announced the move as part of a broader restructuring that will reduce its workforce to between 72,000 and 77,000.
The move will help the company cut personnel costs by 10% to 15% and save at least 400 million euros ($421.4 million) in 2024 alone, the company predicted.
Overall, the cuts are expected to cumulatively reduce Nokia’s costs by up to 1.2 billion euros (nearly $1.3 billion) by the end of 2026. Nokia (NOK) said it would “act quickly” to make changes.
“The most difficult business decisions are those that impact our employees,” CEO Pekka Lundmark said in the statement. “We have extremely talented people at Nokia and will support everyone impacted by this process.”
The announcement came on the same day that Nokia reported worse-than-expected results. Revenue fell 15% in the third quarter compared to the same period last year as “macroeconomic uncertainty and higher interest rates continue to put pressure on operator spending.”
Mobile network revenue fell 19% year-on-year in the third quarter, the company added, due to a slowdown in the pace of 5G rollout in markets such as India.
This week, Swedish rival Ericsson also warned that sales would likely be lower than usual in the second half of 2023, echoing Nokia’s comments about a “challenging environment and macroeconomic uncertainty.”
However, Nokia is sticking to its 2023 outlook and predicts full-year sales of between 23.2 and 24.6 billion euros ($24.4 and 25.9 billion).
“We continue to believe in the medium to long-term attractiveness of our markets,” said Lundmark.