Introduction
Nokia, a Finnish telecommunications giant, announced on Thursday its plan to cut up to 14,000 jobs due to a significant decline in third-quarter earnings. This move is part of their cost reduction strategy.
Addressing the Challenging Market Environment
In response to the challenging market environment, Nokia aims to lower its cost base and improve operational efficiency. The company plans to achieve a gross cost reduction of 800 million euros ($842.5 billion) to 1.2 billion euros by the end of 2026.
Impact on Employees
As a result of these measures, the number of Nokia employees will decrease from the current 86,000 to a range of 72,000 to 77,000.
Third-Quarter Financial Performance
Nokia reported a 20% year-on-year decline in net sales for the third quarter, amounting to 4.98 billion euros. The company’s profit during this period also plummeted by 69% to 133 million euros.
Challenges Faced by Nokia
Nokia, one of the world’s largest telecommunications equipment manufacturers, has been encountering difficulties due to the global economic slowdown and reduced infrastructure spending by mobile operators.
Decline in Mobile Networks Business
The mobile networks business, Nokia’s largest revenue unit, experienced a 24% year-on-year decline in sales, totaling 2.16 billion euros. The division’s operating profit also dropped by 64%.
Regional Factors
Nokia attributed these declines primarily to the North American market. The company also mentioned that sales volumes in India were “moderated” as 5G deployments started to “normalize.”
The Promise of 5G
5G, the next-generation mobile internet technology, offers faster speeds and is expected to revolutionize communication.
Editorial Team
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