As quarterly sales drop by around 15%, Nokia is seeking cost savings of approximately 800 million to 1.2 billion euros by 2026. Cost-saving measures are on the horizon, and one approach to achieve this is job cuts. Currently, Nokia employs 86,000 people, and that number might change soon.
In fact, Nokia announced on Thursday that it would cut up to 14,000 jobs in a new cost-reduction effort. These cuts were announced in light of a one-fifth drop in third-quarter sales. Although Huawei’s technologies have seen reduced usage worldwide, the next-generation 5G equipment sales weren’t favourable for Nokia or its Swedish rival, Ericsson. Slowing demand for 5G equipment in more developed markets is being compensated by higher sales to India, which is a low-margin market.
The reorganization of Nokia’s staff will change the employee count from the current 86,000 to a range between 72,000 and 77,000.
It seems that Nokia is also planning to move to a leaner corporate centre to protect spending on R&D. Does this mean Nokia is again changing its HQ? Well, whatever happens, I’m sure that Nokia will provide good severance packages for affected employees.