Nokia plans to eliminate 14,000 jobs in order to reduce costs after seeing a 20% decline in sales

Despite seeing a 20% decline in sales during Q3, Finnish telecom equipment major Nokia on Thursday unveiled an aggressive cost-cutting plan that might result in the elimination of up to 14,000 jobs.

The third quarter saw a 20% decline in the company’s sales as 5G equipment sales slowed in regions like North America.

“Nokia expects to act quickly on the program with at least 400 million euros of in-year savings in 2024 and a further 300 million euros in 2025,” the company stated in a statement.

In addition, the program is anticipated to result in a reduction of 14,000 workers from Nokia’s current workforce of 86,000 to 72,000–77,000 workers.

Cost Reduction

Assuming on-target variable pay in both periods, Nokia aims to reduce its cost base on a gross basis (i.e., before inflation) by between EUR 800 million and EUR 1,200 million by the end of 2026 compared to 2023. The corporation claimed that this results in a 10-15% decrease in personnel costs.

The hardest business decisions to make are those that affect our employees, according to Nokia President and CEO Pekka Lundmark. At Nokia, we have a staff that is incredibly talented, and we will help anyone who are impacted by this process. In order to respond to market uncertainties and ensure our long-term profitability and competitiveness, resetting the cost-base is an essential step. We continue to be optimistic about our future prospects.

Comparable net sales fell to 4.98 billion euros from 6.24 billion euros last year, missing the estimated 5.67 billion euros, according to a LSEG poll.

Lundmark said, “We continue to believe in the mid to long term attractiveness of our markets. Cloud Computing and AI revolutions will not materialise without significant investments in networks that have vastly improved capabilities. However, while the timing of the market recovery is uncertain, we are not standing still but taking decisive action on three levels: strategic, operational and cost.”

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