HELSINKI, Oct. 19 (Xinhua) -- Finnish telecommunications company Nokia announced a cost-saving plan on Thursday, under which it will cut up to 14,000 jobs globally, as its third quarter (Q3) 2023 results were lower than expected.
Between July and September this year, Nokia's net sales decreased by 20 percent to 4.98 billion euros (5.26 billion U.S. dollars) from 6.24 billion euros in the same quarter one year earlier. Its comparable operating profit dropped by 36 percent to 424 million euros on a year-on-year basis, the company said in its Q3 Financial Report published on Thursday.
Nokia's cost-saving plan is designed to lower the cost base by 800 million euros to 1.2 billion euros over three years. Up to 14,000 jobs will also be cut.
By the end of the cost-cutting program in 2026, Nokia will have between 72,000 and 77,000 employees, compared to the current 86,000.
"The most difficult business decisions to make are the ones that impact our people," Nokia's President and Chief Executive Officer (CEO), Pekka Lundmark, said in a press release.
The job cuts are expected to primarily affect units working in Mobile Networks, Cloud and Network Services, and Nokia's corporate functions, according to the company's press release.
Nokia reiterated its long-term comparable operating margin target of at least 14 percent to be achieved by 2026, as announced with Q3 results on Thursday.
According to the Finnish commerce-oriented newspaper Kauppalehti, nearly 450 jobs in Finland are at risk. "The extent of the need for reduction came as a surprise," Lasse Laurikainen, a senior representative of employees at Nokia's office in Espoo, Finland, commented.
In an analysis published on Thursday, Juha-Matti Mantyla, an economic reporter at Finnish national broadcaster Yle, cited two major reasons behind Nokia's job-cutting plan.
Telecom operators have put their investments on hold because interest rates have risen and cheap funding is no longer available, he said. Operators were also hoarding base stations in their warehouses a few years ago due to a lack of components. Now, they are using their stocks instead of ordering new ones. (1 euro = 1.06 U.S. dollar) ■
