Disappointing financial results of Nokia and market problems have led the Finnish giant to plan extensive layoffs. 16 percent of employees are set to lose their jobs - Bloomberg agency reported. Savings will be counted in hundreds of millions of euros.
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The slowdown in development and investment in the 5G network in the USA and the European Union has caused problems for telecommunications technology manufacturers. This can be seen in the case of Nokia, whose adjusted operating profit in the third quarter was 424 million euros - over 120 million less than expected. It is worth adding that the forecasts for 2023 were lowered during the year.
The effects of Nokia's unsatisfactory results will be felt by its employees. Pekka Lundmark, CEO of Nokia, announced a plan for mass layoffs in the Finnish company. 14,000 people or more are expected to lose their jobs, if the staff reduction includes part-time employees. In total, the Finns will reduce their workforce by 16% - Bloomberg reports.
Lundmark announced that growth in the Indian market "is no longer able to fully compensate for what the company is losing in North America". The CEO of Nokia also added that "what falls will rise again", but the company does not know when this will happen.
– That's why we are taking action. Here and there signs are appearing that demand will start to grow again, but it is too early to call this a common trend – Lundmark stated.
Nokia predicts that the staff reduction will allow the company to save 400 million euros next year, and another 300 million in 2025. The CEO of the Finnish company also conveyed that Nokia is on the right track to achieve the lower limit of the target net sales for this year, which is about 23 billion euros. However, from July to September, the company recorded a 20 percent drop in sales.
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