Finnish telecom multinational Nokia announced that it would slash up to 14,000 workers as part of a broader cost reduction plan after the company’s earnings plunged 69% in the third quarter.
The announcement was made on Thursday as the company reported a 20% year-on-year drop in sales between July and September to €4.98 billion ($5.26 billion). Nokia’s profit over the period plunged by 69% year-on-year to €133 million.
The company said that the decision is expected to help it to lower its cost base and increase operational efficiency to “address the challenging market environment.”
The Espoo-based multinational is aiming to reduce its cost base on a gross basis from 2023 by between €800 million and €1.2 billion by the end of 2026.
Under the plan, the number of employees would be slashed from the current 86,000 to between 72,000 and 77,000.
“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,” the Nokia chief executive Pekka Lundmark said, commenting on the decision.
The corporation did not detail where the job cuts would occur, but said that they are likely to affect its operations in Europe, the UK, and US.
The exact scale of the cost-cutting program will depend on demand for the company’s products, Nokia said, adding that it “expects to act quickly” in order to save as much as €400 million next year and another €300 million in 2025.
“We continue to believe in the mid-to-long-term market, but we are not going to sit and wait and pray that the market will recover anytime soon,” Lundmark said. “We simply don’t know when it will recover.”
The company’s shares were down over 6% on Thursday.
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