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Cleans up: Nokia CEO Pekka Lundmark

Photo: Markku Ulander / picture alliance/dpa/Lehtikuva

The Finnish telecom equipment manufacturer Nokia is setting up a new cost-cutting program and wants to cut up to 14,000 jobs. By the end of 2026, CEO Pekka Lundmark (59) wants to spend between 800 million and 1.2 billion euros less to achieve the long-term target of an operating margin of 14 percent, the group announced on Thursday in Espoo near Helsinki.

Nokia currently employs 86,000 people. According to the plan, personnel costs are to be reduced by up to 15 percent. The program is expected to lead to a reduction in the number of employees to as much as 72,000, it added.

In the third quarter, Nokia's net revenue slumped by a fifth year-on-year to just under five billion euros. Adjusted operating profit fell by more than a third to 424 million euros. On balance, Nokia earned 299 million euros on a comparable basis, compared to 551 million in the previous year.

Profit slumps by a fifth

Due to the lack of business, Nokia now expects only the minimum of its annual sales target. "We are targeting the lower end of our revenue range for 2023," Lundmark said. So far, Nokia wants to raise 23.2 to 24.6 billion euros. The adjusted operating margin – an important indicator of profitability – is expected to be in the middle of the targeted range of 11.5 to 13.0 percent as a result of the current cost-cutting measures.

Nokia had already lowered its annual targets for the first half of the year. Only at the beginning of the week, the Swedish competitor Ericsson had reported a loss of billions in the third quarter and warned of a continued subdued willingness of customers to invest.