According to some recent pieces of information, Nokia will conduct massive job cuts. Reportedly, the company will lay off 14,000 employees. The job cuts are planned in order to minimize operational costs and low revenues. Across the globe, the layoffs will impact 16% of Nokia’s current workforce.
Nokia’s Q3 2023 earnings reports indicate that the company observed a 20% year-on-year (YoY) decline. In the previous quarter, the company made €4.98 billion in revenue, which is less than the €6.24 billion earned during the same quarter in 2022. On the other hand, the profits dropped by 69% YoY to €133 million (roughly $140 million).
In an effort to handle this economic condition, the company intends to take action on three different levels. The first level is strategic, which will make the company more operational with its business groups. It will help with the quick implementation of actions and plans. On the second level, the sales team will be incorporated into business groups to work out a more uniform corporate structure.
In order to preserve profitability and improve operational efficiency, Nokia also intends to lower its cost base. By the end of 2026, the company hopes to have reduced its gross cost base from 2023 by a total of €800 million to €1,200 million. By 2026, it hopes that these steps will have assisted it in achieving an operating margin of at least 14%.
Sadly, this is going to be a major job cut. According to the company, the total international workforce might drop to 72,000 employees in the next three years. Currently, the company has 86,000 employees, of whom 14,000 are planned to be laid off. This is not a final decision yet. However, the company might cut around 9,000 jobs in the upcoming years.
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