Telecom giant Nokia Oyj may reportedly cut up to 14,000 jobs. Reason: The reduced investment in 5G mobile infrastructure from the US and European operators is said to be weighing on the company. While the Espoo, Finland-based mobile network company has confirmed the job cuts, it has not revealed the exact number of positions that will be axed.
5G equipment makers are struggling as operators in the US and the European Union seek to cut capital expenditures and adjust their inventories. Swedish rival Ericsson posted a disappointing outlook this week, saying that market weakness will persist into the fourth quarter and beyond.
What Nokia said in a statement
In a statement the company said that the planned layoffs represent a 10% to 15% reduction in personnel expenses and is expected to save as much as €400 million ($421 million) next year and an additional €300 million in 2025.
Posted weak earnings
Nokia also posted weaker than expected earnings earlier this month. “We are tracking towards the lower end of our net sales range for 2023 and towards the midpoint of our comparable operating margin range,” Chief Executive Officer Pekka Lundmark said in the statement. He had previously painted a gloomy picture for the second half of the year when the company downgraded the full-year guidance in July.
After the second quarter, Nokia cut its full-year guidance for sales to €23.2 billion to €24.6 billion, with a comparable operating margin in a range of 11.5% to 13%. The top end of that range had previously been seen at 14%.
(with agency inputs)
5G equipment makers are struggling as operators in the US and the European Union seek to cut capital expenditures and adjust their inventories. Swedish rival Ericsson posted a disappointing outlook this week, saying that market weakness will persist into the fourth quarter and beyond.
What Nokia said in a statement
In a statement the company said that the planned layoffs represent a 10% to 15% reduction in personnel expenses and is expected to save as much as €400 million ($421 million) next year and an additional €300 million in 2025.
Posted weak earnings
Nokia also posted weaker than expected earnings earlier this month. “We are tracking towards the lower end of our net sales range for 2023 and towards the midpoint of our comparable operating margin range,” Chief Executive Officer Pekka Lundmark said in the statement. He had previously painted a gloomy picture for the second half of the year when the company downgraded the full-year guidance in July.
After the second quarter, Nokia cut its full-year guidance for sales to €23.2 billion to €24.6 billion, with a comparable operating margin in a range of 11.5% to 13%. The top end of that range had previously been seen at 14%.
(with agency inputs)
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