Finnish telecommunications and networking equipment manufacturer Nokia’s plans to reduce the workforce to a certain level. 72,000 to 77,000 employeesAs announced by the multinational company, which reduced its net profit by 35.4% to 708 million euros in the first nine months of 2023, it plans to reduce its cost base from the current 86,000 by the end of 2026.
The company announced that it aims to slightly reduce its cost base in gross terms, that is, before inflation. Between 800 and 1,200 million euros By the end of 2026, compared to 2023, this corresponds to a 10% to 15% reduction in personnel expenses, assuming variable salaries within the target in both periods.
In this sense, Nokia stated that it hopes to act quickly in the implementation of the program and achieve at least 400 million euros of the expected annual savings in 2024 and 300 million euros in 2025, stating that the cost savings are mainly mobile networks, network and cloud services, as in corporate functions.
“The program is expected to lead to the following organization:e 72,000 to 77,000 employees Compared to the 86,000 Nokia currently has,” the company said.
However, he emphasized that the exact scale of the program will depend on the development of end market demand. In net terms, final savings will depend on inflation.
“We continue to believe in the attractiveness of our markets in the medium and long term,” said Nokia’s chairman and CEO. Pekka Lundmark, Cloud computing and AI revolutions will not happen without significant investments in networks with greatly improved capabilities.
“But although at that moment market recovery “We do not stand still when it comes to uncertainty, but we take decisive action at three levels: strategic, operational and cost,” he assured.
“First of all, we are accelerating the implementation of our strategy by supporting business groups. greater operational autonomy. “Secondly, we are rationalizing our operating model by integrating sales teams into business groups, and thirdly, we are realigning our cost base to maintain profitability,” he explained.
Results
On the other hand, the Finnish manufacturer reported that it made attributable net profit in the first nine months of the 2023 fiscal year. 708 million eurosThis marks a decrease of 35.4% compared to the corresponding result for the same period last year.
Total company’s net sales between January and September 16.551 million eurosRevenue from the infrastructure business was 5.2% lower than a year ago, with revenue from the infrastructure business falling 5% to 6,034 million and the cloud and services business falling 2% to 2,243 million; The mobile networks area generated revenue of 7.347 million, 5% less.
For its part, Nokia’s technology division achieved the following revenues: 834 million eurosThis represents a 9% decrease compared to the same range in 2022.
Nokia announced attributable net profit in the third quarter 139 million euros It was 67.4% below the result recorded in the previous year, and its net sales decreased by 20.2% to 4 billion 982 million.
“Our performance in the third quarter has been revealed” Durability “Despite the impact of the weak environment on our net sales, our operating profit decreased,” Nokia’s CEO said.
Looking at the full year, the company maintains its constant currency net sales outlook, which it lowered last July, and expects billing. Between 23,200 and 24,600 million, It maintains its forecast for comparable operating margin of 11.5% to 13%.
“Although our net sales “While we are impacted by the current uncertainty, we expect to see a more normal seasonal recovery in our network business in the fourth quarter,” Lundmark said.