Nokia has announced plans to cut 14,000 jobs

Finnish telecommunications giant Nokia has announced plans to cut 14,000 jobs as part of a cost-cutting strategy.  The decision comes in response to a 20 percent drop in third-quarter sales due to weak demand for 5G devices, and the company doesn't expect an immediate recovery in the market.

    Nokia shares fell 5% in early trading as the company faces significant challenges.  Pekka Lundmark, Nokia's CEO, expressed concern about challenging market conditions, particularly in North America, where Q3 sales were down 40 percent.

    Nokia aims to achieve savings of 800 million to 1.2 billion euros by 2026, aiming to achieve a long-term comparable operating margin of at least 14 percent.  The cost-cutting plan will result in a reduction in headcount, down from 86,000 employees to between 72,000 and 77,000, representing about 16 percent job cuts at the top level.  .  However, Lundmark stressed the importance of protecting research and development efforts.

    Nokia expects to achieve savings of at least 400 million euros in 2024, followed by an additional 300 million euros in 2025.  While Nokia is taking steps to address the challenging market conditions, Lundmark emphasized that the industry needs to invest in faster mid-band equipment.  .  Adjust for increased data traffic.  Currently, only 25% of 5G base stations outside of China are equipped with midband technology.

    The company's quarterly comparable net sales fell to 4.98 billion euros from 6.24 billion euros last year, missing market estimates.  Despite the uncertainty in the industry, Nokia expects a more general seasonal improvement in its network business in the fourth quarter and has not revised its full-year outlook.

    Nokia plans to give greater operational autonomy to its business units to enhance strategic focus within its corporate structure and preserve research and development spending.  Lundmark is cautiously optimistic about the market's prospects for recovery but admits it is too early to declare a broad-based trend.

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