After announcing lower-than-expected third-quarter profits, Finnish telecom giant Nokia indicated on Thursday they may lay off up to 14,000 workers.
“In Q3, we saw an increased impact on our business from macroeconomic challenges,” CEO Pekka Lundmark explained.
Nokia’s cost-cutting effort aims to decrease the number of employees to 72,000 people by 2026, saving the company up to €1.2 billion (US$1.14 billion).
The curriculum focuses on the business sectors Mobile Networks, Cloud and Network Services, as well as corporate roles.
Nokia reported third-quarter profits of a 69% drop from the same period the previous year that amounted to €133 million.
“Earnings were significantly lower than expected, and the outlook is more uncertain.” So it’s not looking good for Nokia in the immediate term,” Atte Riikola, an analyst at equities research company Inderes, told AFP.
The telecoms equipment firm, which is competing for 5G networks with Swedish competitor Ericsson and China’s Huawei, reported a 20% reduction in third-quarter revenue to €4.98 billion compared to 2022.
“We saw some moderation in the pace of 5G deployment in India which meant the growth there was no longer enough to offset the slowdown in North America,” Lundmark said in an interview.
Despite the third-quarter uncertainties, Nokia anticipates “improvement in our network businesses in the fourth quarter.”
Riikola, on the other hand, predicted that Nokia’s “estimates will come down pretty dramatically.”
“There’s a possibility for a negative profit warning,” he went on to say.
