The Finnish telecommunications company is aiming to bringing down its cost base on a gross basis by €800m and €1.2bn by the end of 2026 when compared to this year, which represents a reduction of 10-15% in personnel expenses
Nokia to cut up to 14,000 jobs to lower cost base and enhance operational efficiency. (Credit: Nokia)
Nokia has revealed plans to reduce its workforce by laying off up to 14,000 employees as part of the company’s strategic and operational changes to lower its cost base and enhance operational efficiency.
Through the layoffs, the Finnish telecommunications company aims to reduce its employee organisation to about 72,000-77,000 compared to its current workforce of 86,000 employees.
Nokia is aiming to bringing down its cost base on a gross basis by €800m and €1.2bn by the end of 2026 when compared to this year. It represents a reduction of 10-15% in personnel expenses.
Besides, the company intends at least €400m in-year savings in 2024 and a further €300m in the following year.
As part of the company’s efforts to streamline its operating model, Nokia will integrate the sales and other go-to-market teams into each of the four profit and loss (P&L) responsible business groups that were created in 2021.
Nokia expects to achieve cost savings mainly in mobile networks, cloud and network services, and the telecommunications company’s corporate functions.
The company also said that it will protect its research and development (R&D) capacity and commitment to technology leadership in order to meet the market environment.
Nokia president and CEO Pekka Lundmark said: “We continue to believe in the mid to long term attractiveness of our markets. Cloud Computing and AI revolutions will not materialise without significant investments in networks that have vastly improved capabilities.
“However, while the timing of the market recovery is uncertain, we are not standing still but taking decisive action on three levels: strategic, operational and cost. First, we are accelerating our strategy execution by giving business groups more operational autonomy.
“Second, we are streamlining our operating model by embedding sales teams into the business groups and third, we are resetting our cost-base to protect profitability.”
Earlier this year, Nokia deployed a 10G broadband network for Finland-based optical fibre network operator and service provider Valoo.