Nokia Records 20% Drop in Sales and Plans Layoffs: Economic Uncertainty and Cost Savings in Focus

In the third quarter of this year, Nokia recorded a 20 percent drop in sales, amounting to almost five billion euros (123.66 billion crowns). At the same time, operating profit also fell to 241 million euros, which represents 5.96 billion crowns in conversion. Compared to last year, the profit fell by more than half.

Dissatisfying economic results and uncertain prospects for the future are the main reasons why Nokia decided to make layoffs.

“We are facing great macroeconomic uncertainty. High interest rates are pushing down the expenses of telecommunications operators, which ultimately affects our company as well,” Nokia representatives said on Thursday in official statement.

They want to save a billion euros

Nokia currently employs 86,000 people, after the completion of austerity measures, the number of employees should range between 72,000 and 77,000, the Finnish manufacturer of telecommunications components for 5G networks plans.

Nokia decided to lay off despite the fact that it expects to fulfill its plans this year, i.e. that the total annual sales will be between 23.2 and 24.6 billion euros (573.5 and 608.06 billion CZK).

“The recovery in demand is uncertain. That’s why we are now taking decisive action on three levels: strategic, operational and cost,” explained company boss Pekka Lundmark, adding that layoffs are not the only element of the planned savings program.

Nokia expects to achieve savings of 800 million to 1.2 billion euros by 2026, i.e. 19.77 to 29.66 billion crowns.

An earthquake in the technology sector

Server Layoffs.fyi reports that more than 240,000 jobs have been cut in the technology sector this year. It is this site that specializes in recording information about layoffs in technology companies.

If we included last year as well, the total number would be more than 160,000 higher. Technology companies started massive layoffs already in the second half of 2022.

11,000 people was just the beginning. Instagram and Facebook will continue to release

For example, Meta, the company behind the social networks Facebook and Instagram, already laid off 11,000 people last fall. The next round of layoffs, in which thousands of people lost their jobs, took place at the beginning of spring.

Dutch consumer electronics and medical equipment maker Philips announced at the end of January that it plans to cut another 6,000 jobs over the next two years. At the same time, last October this company was hit by large-scale layoffs, which affected 4,000 people.

In January, other technology companies also reported on mass layoffs – the European software company SAP dismissed approximately three thousand employees, and the American technology giant International Business Machines (IBM) then dismissed 3,900 people.

Xiaomi, Twitter, HP and many others have also decided to lay off their jobs.

LinkedIn lays off hundreds of people. Again

2023-10-19 08:47:23
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