Bad luck for the Finnish telecoms giant. Nokia said on Thursday (October 19) that it intended to cut its workforce by 14,000 jobs after a fall in third-quarter profits.
“In the third quarter, we saw an increased impact of macroeconomic challenges on our business,” CEO Pekka Lundmark said in a statement. After the results were published, Nokia’s share price fell 2% to 3.26 euros around 06:00 GMT.
A 69% drop in profits
The group recorded a 69% drop in third-quarter profits to 133 million euros ($140 million) compared to the previous year. Nokia therefore intends to reduce the current number of employees from 86,000 to 72,000.
The group’s savings program is expected to deliver cost reductions of up to €1.2 billion by 2026, notably targeting mobile networks, as well as cloud and network services. “The most difficult decisions to make are those that impact our staff,” commented Pekka Lundmark.
A battle with Huawei and Ericsson
The telecoms equipment manufacturer, engaged in a battle for 5G networks with its Swedish rival Ericsson and the Chinese Huawei, saw its sales fall by 20% to 4.982 billion euros in the third quarter compared to 2022.
“We saw some slowdown in the pace of 5G deployment in India, meaning that growth there was no longer sufficient to offset the slowdown in North America,” the official added. Nokia nevertheless expects “an improvement” in its network activities “in the fourth quarter.”