Nokia to sack 14,000 people over the next 3 years

Nokia has revealed plans to reduce its workforce by approximately 14,000 employees, equivalent to around 16% of its current workforce, over the next three years.

Currently employing 86,000 people, the Finnish mobile company intends to trim its staff down to a range between 72,000 and 77,000 by the close of 2026.

This workforce reduction is a part of the company’s strategy to cut costs by EUR 800–1,200 million over three years, aiming to ensure sustainable and profitable growth in a challenging market environment.

This reduction translates to a 10–15% decrease in personnel expenses.

“Nokia anticipates swift implementation, with at least EUR 400 million in savings expected in 2024 and an additional EUR 300 million in 2025,” new reports state.

The announcement follows a reported 20% decrease in sales and a 69% decline in profits during the most recent quarter, spanning from July to September, compared to the same period in the previous year.

Nokia’s President and Chief Executive Officer (CEO), Pekka Lundmark, expressed, “We remain firm in our belief in the long-term attractiveness of our markets. The Cloud Computing and AI revolutions require substantial investments in advanced network capabilities. However, acknowledging the uncertain timing of market recovery, we are taking decisive action on strategic, operational, and cost fronts. We are empowering business groups with greater operational autonomy, streamlining our operating model by integrating sales teams into these groups and resetting our cost structure to safeguard profitability. I believe these measures will fortify our position and deliver significant value to our shareholders.”

In February of this year, Nokia introduced a new logo, symbolizing a strategic shift towards a different business model that distances itself from its history of phone manufacturing and emphasizes a focus on B2B products.