Nokia to cut up to 14000 jobs globally, 450 in Finland

Telecommunications giant Nokia on Thursday announced to cut 9000 to 14000 jobs with the view to save an amount between EUR 800 million and EUR 1 200 million by the end of 2026, said Nokia in a press release on Thursday.

AS a part of the reduction of manpower, about 450 employees in Finland will face the risk of losing job, reported Finnish language business daily Kauppalehti.

Nokia expected to act quickly on the program with at least EUR 400 million of in-year savings in 2024 and a further EUR 300 million in 2025.

The program is expected to lead to a 72 000 – 77 000 employee organization compared to the 86 000 employees Nokia has now.

Long-term comparable operating margin target of at least 14% to be delivered by 2026, as announced with Q3 results on Thursday.

“We continue to believe in the mid to long term attractiveness of our markets. Cloud Computing and AI revolutions will not materialize without significant investments in networks that have vastly improved capabilities. However, while the timing of the market recovery is uncertain, we are not standing still but taking decisive action on three levels: strategic, operational and cost. First, we are accelerating our strategy execution by giving business groups more operational autonomy. Second, we are streamlining our operating model by embedding sales teams into the business groups and third, we are resetting our cost-base to protect profitability. I believe these actions will make us stronger and deliver significant value for our shareholders,” said President and Chief Executive Officer of Nokia Pekka Lundmark.

The cuts will represent a 10–15% reduction in personnel expenses.

The cost savings are expected to primarily be achieved in Mobile Networks, Cloud and Network Services and Nokia’s corporate functions. One-time restructuring charges and cash outflows of the program are expected to be similar to the annual cost savings achieved.

“The most difficult business decisions to make are the ones that impact our people. We have immensely talented employees at Nokia and we will support everyone that is affected by this process. Resetting the cost-base is a necessary step to adjust to market uncertainty and to secure our long-term profitability and competitiveness. We remain confident about opportunities ahead of us,” Lundmark added.

Nokia will hold an investor and analyst progress update event on December 12, 2023 at its headquarters in Espoo, Finland and will go into more detail on the evolution of its operating model along with an update on the progress of Mobile Networks and Cloud and Network Services.

These proposed changes are subject to local consultation requirements with employee representatives and Nokia’s social partners where applicable.