Finland: The Finnish multinational corporation Nokia has said it will cut up to 14,000 jobs over the next three years. It comes as profits fell on weakening demand for its 5G mobile network equipment in North America.
Nokia aims to reduce 16 percent of its worldwide workforce of 86,000 employees as part of a cost-cutting initiative to save $1.2 billion by 2026.
This decision coincided with the company reporting a 70 percent decline in third-quarter profits, dropping to $139 million from $448 million the previous year.
“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, Mr. Pekka Lundmark, remarked.
“Resetting the cost base is a necessary step to adjust to market uncertainty and to secure our long-term profitability and competitiveness. We remain confident about opportunities ahead of us,” Mr. Lundmark added.
Nokia, based in Espoo, Finland, hasn’t specified the locations for the job reductions. The company currently has approximately 37,700 employees in Europe, including the UK, with offices in Bristol, Cambridge, and Reading.
The job cuts are expected to impact its operations in the US as well, where it employs around 10,500 staff in offices including Chicago and Dallas.
Nokia mentioned that the extent of the cost-cutting initiative would be determined by product demand. However, it anticipates quick action to achieve savings of up to $420 million next year and an additional $315 million in 2025.
The company said that demand across the wider mobile network market was likely to drop 9 percent overall this year. That is compared with previous expectations for a 2 percent decline, as per the statement.
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