Nokia (NOK, Financial) is intensifying its cost-cutting initiatives by reducing its workforce in the Greater China region by nearly 2,000 employees, accounting for one-fifth of its staff there. Additionally, the company plans to cut 350 jobs in Europe. These layoffs are part of Nokia's broader strategy to save between 800 million and 1.2 billion euros by 2026. While Nokia confirmed ongoing discussions with European employees regarding the 350 job cuts, it has not commented on the reductions in China.
As of December 2023, Nokia employed 10,400 people in Greater China and 37,400 in Europe. These employment cuts are part of a larger plan to reduce the workforce by 14,000, aiming to slash costs further. The company's recent earnings report revealed a 9% increase in operating profit during the third quarter, attributed to cost reductions, but sales fell short of expectations, causing a 4% dip in its stock price.
A Nokia spokesperson stated that the company has already achieved savings of 500 million euros and plans to reduce its workforce to between 72,000 and 77,000 by 2026, down from approximately 86,000 when the layoffs were announced. Currently, Nokia employs over 78,500 individuals.
CEO Pekka Lundmark assured reporters in a call that while cost reductions are underway, the company remains committed to its research and development efforts. He expressed satisfaction with the pace of cost-cutting, which is slightly ahead of schedule, indicating that Nokia is focusing on optimizing its cost structure while ensuring long-term growth and innovation.
