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HomeBusinessNokia Announces Job Losses in Finland, Issues Profit Warning

Nokia Announces Job Losses in Finland, Issues Profit Warning

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Finnish telecommunications firm Nokia has announced plans to cut its workforce in Finland by 155 employees following the conclusion of codetermination talks with staff representatives.

Workers based in Espoo will make up around two thirds of the planned redundancies, while the remainder will affect employees in Oulu or Tampere.

Nokia currently employs around 7,000 people across the three cities.

In May, the company stated that the restructuring plans could lead to the loss of a maximum of 208 jobs.

In a statement on Friday, Nokia said that those facing redundancy will be offered the opportunity to participate in a company support programme aimed at helping them find jobs either within Nokia, outside the company or as entrepreneurs.

The tech firm added that the redundancies are necessary as part of restructuring plans and cost-cutting measures.

Nokia’s Mobile Networks Business Group President and Country Manager for Finland Tommi Uitto said in May that the job cuts were necessary because Nokia needs to react to the current economic environment as well as to changes in customers’ purchasing behaviour.

Nokia announced a cost restructuring programme in March 2021 which at the time was expected to lead to between 5,000 and 10,000 job losses worldwide, depending on market developments.

The company expects the programme will reduce costs by up to 600 million euros globally by the end of this year.

Nokia issues profit warning

In a separate statement issued on Friday, Nokia also announced a reduced profit warning due to a “weaker demand outlook” for the second half of 2023.

“Nokia is lowering its full year net sales outlook to a range of EUR 23.2 billion to EUR 24.6 billion (previously EUR 24.6 billion to 26.2 billion) and narrowing its comparable operating margin range outlook to 11.5% to 13% (previously 11.5% to 14%),” the statement said.

The adjustments are related to the company’s Network Infrastructure and Mobile Networks business groups, the press release added.

Based on preliminary figures, Nokia had net sales of around 5.7 billion euros in Q2 and the comparable operating profit margin was about 11 percent.

The company noted that the weaker outlook for Q3 and Q4 of 2023 is due to both the macroeconomic environment and customers’ inventory digestion.

“Customer spending plans are increasingly impacted by high inflation and rising interest rates along with some projects now slipping to 2024 – notably in North America,” the statement said.

Source: Yle

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