Nokia has announced a plan for mass layoffs. Thousands of people will lose their jobs
9:55 AM EDT, October 20, 2023
Disappointing financial results at Nokia and market difficulties have led the Finnish giant to plan extensive layoffs. The company is set to lay off 16 percent of its workforce - Bloomberg agency reported. Savings are to be counted in hundreds of millions of dollars.
The halt in development and investment in the 5G network in the US and the European Union has caused problems for telecommunications technology manufacturers. This is visible, for example, in the case of Nokia, whose adjusted operating profit in the third quarter was 424 million euros - over 120 million less than analysts expected. And it's worth adding that during the year, forecasts for 2023 were adjusted downwards.
The effects of Nokia's unsatisfactory results will be felt by its employees. There will be significantly fewer of them soon. Pekka Lundmark, CEO of Nokia, announced a plan for mass layoffs in the Finnish company.
14 thousand people or more are expected to lose their jobs, if the staff reductions include those employed part-time. Overall, Finns will reduce their workforce by 16 percent - reports Bloomberg.
Hundreds of millions of euros in savings for Nokia
Lundmark said that the growth in the Indian market "is no longer able to fully compensate for what the company is losing in North America". Nokia's Managing Director added that "what falls will rise again", but the company does not know when it will happen. - Therefore, we take action - he explained.
Nokia predicts that staff reduction will allow the company to save 473 million dollars next year, as well as an additional 354 million in 2025.
The CEO of the Finnish company simultaneously relayed that Nokia is on a good track to achieve the lower limit of the targeted net sales for this year, which is about 27.5 billion dollars. However, from July to September, the company recorded a 20 percent drop in sales.
