Nokia, once a tycoon on the mobile phone market and now a company focusing primarily on telecommunications infrastructure (mainly 5G networks), announced the launch of a restructuring plan.
The Finnish giant plans to lay off up to 14,000 employees. Nokia forecasts that in this way it will be able to save between EUR 800 million and EUR 1.2 billion by 2026, which will allow it to achieve a long-term operating margin of at least 14 percent.
Such a drastic reduction in employment is related to disastrous financial results. In the third fiscal quarter of this year. the company recorded a 20% drop in sales. Nokia suffers primarily from less interest in 5G infrastructure in markets such as North America.
net sales in the last quarter reached EUR 4.98 billion, compared to EUR 6.24 billion generated in the same period last year. This result also turned out to be much worse than analysts’ expectations – the market consensus was EUR 5.67 billion.
Nokia intends to take action quickly under the program, achieving at least EUR 400 million in savings in 2024 and another EUR 300 million in 2025
– the company announced in a statement.
Although continued uncertainty impacted our net sales in the third quarter, we expect more normal seasonal improvement in our network business in the fourth quarter
– emphasized the company’s general director, Pekka Lundmark. Nokia currently employs approximately 86,000 employees. After collective layoffs, their number will drop to approximately 72,000-72,000.
Nokia no longer sells Nokia smartphones
Back in 2007, the Finnish Nokia was the hegemon on the mobile phone market with over a billion users. It was then that the famous issue of Forbes magazine appeared, which asked on the cover whether anyone could threaten the “mobile king”.
This challenge was taken up by Steve Jobs, who in the same year presented the first iPhone to the world. And started the smartphone revolution. Nokia’s self-confident managers not only did not sense the threat from Apple, but later also ignored the growing strength of Android.
There could only be one effect. Within 6 years, Nokia’s share in the mobile device market fell from over 50 percent to just 3 percent. Microsoft tried to save the famous brand from the crisis, which took over Nokia’s mobile branch in 2014 for over $7 billion.
The beginnings were promising, but it quickly turned out that Nokia smartphones powered by Windows Mobile had little chance against iPhones and Android devices.
Currently, the legendary brand is owned by HMD Global. However, it is too late to conquer the smartphone market.
Source: Gazeta
Mabel is a talented author and journalist with a passion for all things technology. As an experienced writer for the 247 News Agency, she has established a reputation for her in-depth reporting and expert analysis on the latest developments in the tech industry.
