The firm expects a saving of €400 million next year, and an additional €300 million in 2025

Nokia has announced today that is set to cut between 9,000 and 14,000 jobs by 2026, in an effort to reduce costs after a steep earnings loss in its third quarter. 

The company aims to cut costs by up to £1 billion by 2026, which it will achieve in part by reducing its current 86,000 strong workforce to between 72,000 and 77,000. 

“The market situation is really challenging and it is witnessed by the fact that in our most important market, which is the North American market, our net sales are down 40% in Q3,” CEO and President Pekka Lundmark told Reuters. 

In the company’s Q3 financial results released today via webinar, the firm saw a 20% drop in its third-quarter year-on-year sales, dropping to €4.98 euros. Profits in the same period dropped by 69% year-on-year to €133 million. 

The firm also noted that high inflation and interest rates have negatively impacted consumer spending, causing revenues to take a hit. 

“In the last three years we have invested heavily to strengthen our technology leadership across the business giving us a firm foundation to weather this period of market weakness.” said Pekka Lundmark, President and CEO. 

“We continue to believe in the mid-to-long-term market, but we are not going to sit and wait and pray that the market will recover anytime soon,” Lundmark said. “We simply don’t know when it will recover.” 

“Resetting the cost base is a necessary step to adjust to market uncertainty and to secure our long-term profitability and competitiveness,” continued Lundmark. 

“We remain confident about opportunities ahead of us”. 

In 2020, Nokia signed a deal with BT to become their largest equipment vendor, following the ban of Huawei from the UK’s 5G networks. However, since then, equipment makers have been struggling to capitalise as both the EU and US slashed spending, slowing down 5G rollout. 

Nokia is not alone in its efforts to reduce costs as a result of unfavourable market changes. Rival Ericsson also announced plans to cut 8,500 jobs earlier this year, along with BT and Vodafone, as the economic downturn bites into revenues globally. 

Upon the news released today, Nokia shares were down 2%.  

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