On Thursday, Nokia said that it could cut its workforce by as many as 14,000 workers/employees after it reported lower-than-expected third-quarter profits.
CEO Pekka Lundmark said in a statement, “In the third quarter we saw an increased impact on our business from the macroeconomic challenges.”
Finnish telecom giant Nokia’s savings program is expected to reduce the company’s workers to as low as 72,000, decreasing costs by up to 1.2 billion euros ($1.14 billion) by 2026, the company said.
The program targets business areas Mobile Networks, Cloud and Network Services, and corporate functions.
The company’s profits reached 133 million euros in the third quarter, a 69 percent drop from the same period a year ago, Nokia reported.
Atte Riikola, an analyst at equity analysis firm Inderes, told AFP, “The earnings were much weaker than expected and the outlook is more uncertain. So it’s not looking that good in the short term for Nokia.”
The telecommunications equipment maker, which is sealed in a fight for 5G networks with Swedish rival Ericsson and China’s Huawei, said its sales declined by 20 percent to 4.98 billion euros in the third quarter compared to 2022.
Lundmark said, “We saw some moderation in the pace of 5G deployment in India which meant the growth there was no longer enough to offset the slowdown in North America.”
Despite the uncertainty in the third quarter, Nokia expects to see “improvement in our network businesses in the fourth quarter.”
But Riikola thought that Nokia’s “estimates will come down pretty dramatically.”
He added, “There’s a possibility for a negative profit warning.”
