Nokia to downsize workforce by 14,000 following Q3 2023 sales drop

Nokia plans to cut up to 14,000 jobs by 2026 as part of a cost-reduction plan, following a decrease in Q3 2023 sales and a drop in 5G equipment interest.
Nokia to downsize workforce by 14,000 following Q3 2023 sales drop

As part of its Q3 2023 financial results presentation earlier today, Finnish telecom group Nokia announced that it will be reducing its workforce by up to 14,000 by the end of 2026. Down from approximately 86,000 employees, this figure represents a 16 percent downsizing at the high end. 

The move is part of a longer-term cost-reduction plan that aims to save the company between €800 million to €1.2 billion over a three-year period.

Nokia's financial outlook. Source: Nokia
Nokia's three year plan. Source: Nokia

While Nokia reported Q3 2023 sales at €5 billion, this figure represents a 15 percent decrease year-on-year in constant currency, a Q3 2023 gross margin of 39.2 percent, down 120 base points year-on-year, and a Q3 2023 operating margin of 8.5 percent, down 200 base points year-on-year.

Nokia Q3 2023 results. Source: Nokia
Nokia Q3 2023 results. Source: Nokia

The company points to a diminished interest and sales of its next-generation 5G equipment, and sales in the US plummeting by 40 percent in Q3 as key reasons behind the cost-cutting measures.

In an interview with Reuters, Nokia CEO Pekka Lundmark commented:

"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.

"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. We simply don't know when it will recover."

Lead image: Photo by Pawel Czerwinski

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