Finnish tech giant Nokia has announced it made a significant loss in the 3rd quarter this year.
The latest figures out today show Nokia’s operating profits from July to September were 27% less than the same period a year ago, down from €668 million to €487 million.
Sales have stayed relatively stable around €5.5 billion.
“We noted earlier this year that we would need to take further cost actions in order to deliver on our 2020 guidance. Today, we are quantifying those actions and raising the certainty that we can meet those commitments” says Nokia President and CEO Rajeev Suri in a press release.
Nokia plans job cuts
To help cut costs, Nokia is now embarking on an ambitious plan to save €700 million over the next few years. That will mean staff lay-offs, but the company isn’t saying yet how many jobs are at risk.
“Our industry is one where a constant focus on costs is essential” says Suri.
“We will also redouble our efforts to ensure that Nokia’s disciplined operating model remains a source of competitive advantage for us, and that we maintain our position as the industry leader in cost management, productivity and efficiency” he adds.
Planned changes are expected to result in a net reduction of employees globally. Such reductions will be subject to local consultation requirements with employee representatives, once detailed plans are developed.
“Even if these actions are right for our business, we do not take them lightly given the expected impact on our employees. We will strive to do right for those people affected by the planned changes, acting transparently and providing transition and support to those who need it” says Rajeev Suri.
Apart from staff cuts, the savings are also expected to come from a wide range of areas in Nokia’s broad business portfolio, including investments in digitalization to drive more automation and productivity; further process and tool simplification; and what the company calls significant reductions in central support functions.