Nokia Layoffs 2023: Finnish telecommunications equipment group Nokia plans to cut up to 14,000 jobs as part of a cost-saving initiative following a 20% drop in third-quarter sales, attributed to slowing 5G equipment sales in markets like the U.S.
The company aims to achieve cost savings between 800 million euros and 1.2 billion euros by 2026, with a target of attaining an operating margin of at least 14% by that year.
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Nokia's restructuring plan is expected to reduce its workforce from 86,000 to 72,000-77,000 employees. In the third quarter, the company posted weaker-than-expected earnings, with an operating profit of $467 million and adjusted earnings per share at 5 cents, falling short of the estimated 7 cents.
After revising its full-year sales guidance, Nokia now anticipates sales in the range of 23.2 billion euros to 24.6 billion euros, with a comparable operating margin between 11.5% and 13%. Makers of 5G equipment are grappling with reduced investments by U.S. and EU operators.
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Nokia plans to streamline its corporate center to offer strategic oversight while maintaining R&D spending and providing more autonomy to its business units.
In a similar industry challenge, Swedish competitor Ericsson AB reported a drop in shares and projected continued market weakness into the fourth quarter and beyond. This is due to reduced investments in 5G infrastructure by U.S. and European operators.