Big news has come about telecom giant Nokia, after which an atmosphere of concern has been created for its employees. Nokia will face a reduction, and the company will fire 14,000 people under this. Nokia has taken this decision as part of its new cost-cutting plan after sales fell by 20 per cent in its third-quarter results. This decline in sales has been seen due to the slow sales of the company’s 5G equipment.
Nokia Took This Decision For Cost Saving
According to news in the Economic Times, Finnish Telecommunications Equipment Group’s Nokia estimates that by 2026, it can achieve cost savings of between 800 million and 1.2 billion euros. By this time, the company is expected to reach an operating margin of around 14 per cent. Under this, the company aims to reduce the number of employees of the company from 86,000 to between 72,000-77,000.
How Were Nokia’s Quarterly Results?
Nokia has performed less well than expected this time. The company’s operating profit stood at Rs 467 million in the third quarter. Its adjusted earnings have also declined to 5 cents per share, whereas analysts had estimated around 7 cents. The company has also reduced its second-quarter sales guidance from 24.6 billion euros to 23.2 billion dollars. At the same time, the company estimated the operating margin to be between 11.5 per cent and 13 per cent, whereas earlier, it was estimated to be 14 per cent.
Challenging Environment For 5G Equipment Makers At This Time
Due to the decision by the US and European Union to reduce capital expenditure and reduce their inventory, 5G equipment manufacturers are struggling on the revenue and profit front. Nokia has recently displayed its new logo and revealed it even before the Mobile World Congress in Barcelona today.
