Nokia says it will cut up to 14,000 jobs

Hong Kong (CNN) — Nokia will slash up to 14,000 jobs in a major cost-cutting drive to address a “weaker” market environment, it said in a statement on Thursday.

The Finnish telecom giant, a major provider of 5G equipment that employs 86,000 people, announced the move as part of a wider restructuring that will lower its headcount to between 72,000 and 77,000.

The move will help the company reduce staffing expenses by 10% to 15%, and save at least €400 million ($421.4 million) in 2024 alone, the company projected.

Overall, it said the reductions are expected to trim Nokia’s costs by up to €1.2 billion (nearly $1.3 billion) cumulatively by the end of 2026. Nokia (NOK) said it would “act quickly” to make changes.

“The most difficult business decisions to make are the ones that impact our people,” CEO Pekka Lundmark said in the statement. “We have immensely talented employees at Nokia and we will support everyone that is affected by this process.”

The announcement came on the same day that Nokia reported worse-than-expected results. It said sales in the third quarter had fallen 15% compared to the same period a year ago, as “macroeconomic uncertainty and higher interest rates continue to pressure operator spending.”

Mobile network sales fell 19% in the third quarter compared to the previous year, the company added, due to a slowdown in the pace of 5G deployment in markets such as India.

This week, Swedish rival Ericsson also warned that sales in the second half of 2023 would likely come in lower than usual, echoing Nokia’s remarks of a “challenging environment and macroeconomic uncertainty.”

But Nokia has maintained its outlook for 2023, forecasting between €23.2 billion and €24.6 billion ($24.4 billion and $25.9 billion) in sales for the full year.

“We continue to believe in the mid to long term attractiveness of our markets,” Lundmark said.