By Oluwatosin Maliki
Nokia on Thursday said it is contemplating reducing its workforce by cutting down on jobs to accommodate as many as 14,000, this comes after it reportedly performed lower than expected in third-quarter profits.
CEO Pekka Lundmark said in a statement, “In the third quarter we saw an increased impact on our business from the macroeconomic challenges”.
The Finnish telecom giant expressed that Nokia’s savings programme is expected to reduce the firm’s employees to as low as 72,000, noting that this will help cut down on costs by up to 1.2 billion euros ($1.14 billion) by 2026.
Furthermore, the programme is now targeting business areas such as; Mobile Networks, Cloud and Network Services and corporate functions.
The company profits, in the third quarter reports a 133 million euros, which indicates a 69% drop from the same period a year ago.
An analyst, Atte Riikola at equity analysis firm Inderes told AFP, “The earnings were much weaker than expected and the outlook is more uncertain. So it’s not looking that good in the short term for Nokia”.
The telecom manufacturer who is in a fierce competition for 5G networks with other companies like Swedish rival Ericsson and China’s Huawei, expressed that its sales declined by 20 percent to 4.98 billion euros in the third quarter compared to 2022.
Lundmark stated, “We saw some moderation in the pace of 5G deployment in India which meant the growth there was no longer enough to offset the slowdown in North America”.
However, despite the uncertainty in the third quarter, Nokia has it’s hopes high and expects to see “improvement in our network businesses in the fourth quarter.”
But analyst Riikola believes that Nokia’s “estimates will come down pretty dramatically.”
In addition, he said, “There’s a possibility for a negative profit warning”.
