Nokia will cut up to 14,000 jobs to reduce costs after earning 35% less until September

MADRID, 19 Oct.

Nokia will cut up to 14,000 jobs to reduce costs after earning 35% less until September


The Finnish telecommunications and network equipment manufacturer Nokia intends to reduce its workforce to a range of between 72,000 and 77,000 employees, compared to the current 86,000, to reduce its cost base by the end of 2026, as announced by the multinational, which in the In the first nine months of 2023, net profit was reduced by 35.4%, to 708 million euros.

The company has explained that it aims to reduce its cost base in gross terms, that is, before inflation, in a range of between 800 and 1,200 million euros by the end of 2026 compared to 2023, assuming a variable payment within the target in both periods, representing a 10% to 15% reduction in personnel costs.

In this sense, Nokia has indicated that it hopes to act quickly in the implementation of the program and achieve at least 400 million euros of the expected annual savings in 2024 and another 300 million in 2025, adding that the cost savings will be achieved mainly in mobile networks, network and cloud services, as well as in corporate functions.

"The program is expected to lead to an organization of 72,000 to 77,000 employees compared to the 86,000 that Nokia currently has," the company said.

However, he stressed that the exact scale of the program will depend on the evolution of final market demand, while the final savings in net terms will depend on inflation.

"We continue to believe in the attractiveness of our markets in the medium and long term," defended the president and CEO of Nokia, Pekka Lundmark, for whom the cloud computing and AI revolutions will not materialize without significant investments in networks. that have greatly improved capabilities.

"However, while the timing of market recovery is uncertain, we are not standing still but taking decisive action at three levels: strategic, operational and cost," he said.

"First, we are accelerating the execution of our strategy by giving business groups more operational autonomy. Second, we are streamlining our operating model by integrating sales teams into business groups and, third, we are realigning our cost base to protect profitability," he explained.

On the other hand, the Finnish manufacturer has reported that in the first nine months of fiscal year 2023 it obtained an attributable net profit of 708 million euros, which implies a drop of 35.4% compared to the result corresponding to the same period of the year. last year.

Between January and September, the company's net sales totaled 16,551 million euros, 5.2% less than a year before, including a 5% drop in revenue from the infrastructure business, to 6,034 million, and a 2% drop in the cloud and services business, with 2,243 million, while the mobile networks area generated revenues of 7,347 million, 5% less.

For its part, the business of Nokia's technology division reached revenues of 834 million euros in the first nine months of 2023, which represents a decline of 9% compared to the same interval in 2022.

In the third quarter, Nokia recorded an attributable net profit of 139 million euros, 67.4% below the result recorded a year earlier, while its net sales decreased by 20.2%, to 4,982 million.

"Our performance in the third quarter demonstrated resilience in our operating margin despite the impact of the weaker environment on our net sales," said Nokia's CEO.

Looking at the year as a whole, the company maintains its outlook for net sales in constant currency, which it lowered last July, and expects to invoice between 23.2 billion and 24.6 billion, while maintaining its forecast of a comparable operating margin of 11.5 % to 13%.

"While our third quarter net sales were affected by the current uncertainty, we expect to see a more normal seasonal improvement in our network businesses in the fourth quarter," Lundmark said.