In a move to cut costs and achieve financial stability, Nokia, a Finnish telecommunications equipment company, has announced its intention to reduce its workforce. The move comes in response to a significant drop of 20 per cent in the third-quarter sales. This was primarily attributed to the slowdown in the sales of 5G equipment in regions such as North America.
The company will be trimming its workforce by up to 14,000 jobs as part of an initiative to streamline operations and lower expenditures. According to a statement from the company, the cost-cutting initiative is expected to lead to a more streamlined workforce, bringing down the current 86,000 employees to between 72,000 to 77,000.
This cost-cutting strategy is part of Nokia’s efforts to align itself with its long-term goal of achieving a minimum comparable operating margin of 14 per cent by the year 2026. It is hoped that this initiative will help the company gain immediate advantages, targeting at least €400 million in savings for the current year, and an additional €300 million in 2025.
With all the ongoing uncertainties, the company’s top management is still hopeful about the possibility of a positive change. In a statement to the media, Pekka Lundmark, chief executive officer, Nokia, has conveyed his confidence that the forthcoming fourth quarter will witnesse a marked improvement.
He emphasised that resetting the cost structure is an essential measure to adapt to market uncertainties and ensure the company’s long-term profitability and competitiveness.