Finnish telecom equipment maker faces falling sales as customers retrench
Nokia said it would slash up to 14,000 jobs as part of a cost-cutting programme as the Finnish telecom equipment maker’s customers scale back spending.
The group said on Thursday it was targeting cost cuts of up to €1.2bn by 2026 as it laid out plans to reduce its workforce to between 72,000 and 76,000, down from the 86,000 it currently employs.
A combination of higher interest rates and slower global growth prompted its customers to retrench, Nokia said. The group’s third-quarter sales fell by a fifth.
The move to remove costs from the business follows a profit warning this month from Swedish rival Ericsson, which announced it would deepen its own restructuring plans.
Both companies had hoped the recent introduction of 5G networks would boost sales and profits, but apart from some early adopters, the technology has not proved the catalyst the Scandinavian operators need.
“The most difficult business decisions to make are the ones that impact our people. We have immensely talented employees at Nokia and we will support everyone that is affected by this process,” said Pekka Lundmark, Nokia’s chief executive.
“Resetting the cost base is a necessary step to adjust to market uncertainty and to secure our long-term profitability and competitiveness,” he added.
