Nokia, the Finnish telecommunications company, has announced strategic and operational changes to streamline its business and reduce costs. The company aims to protect its profitability and position itself for long-term growth amidst market uncertainty.
Under the new strategy, Nokia plans to empower its four business groups with increased operational autonomy and agility. This will enable them to better address opportunities in their respective markets and build new partnerships, implement business models, and invest in technology leadership.
Additionally, Nokia will be streamlining its operating model by embedding sales teams into each business group. This change aims to create dedicated sales teams that can better seize growth opportunities with existing and new customers. The sales teams will collaborate across Nokia to ensure customers can benefit from the breadth of the company’s offerings.
To protect profitability, Nokia will reset its cost base by reducing personnel expenses. The company targets a gross basis cost reduction of EUR 800-1,200 million by the end of 2026, representing a 10-15% reduction in personnel expenses. Nokia plans to achieve in-year savings of at least EUR 400 million in 2024 and an additional EUR 300 million in 2025. The program is expected to result in a reduction of employees from the current 86,000 to 72,000-77,000.
Nokia’s President and CEO, Pekka Lundmark, expressed confidence in the company’s future opportunities and emphasized the necessary steps to adjust to market uncertainty and secure long-term profitability and competitiveness. The company remains committed to research through Nokia Bell Labs.
Nokia will provide more detailed information on the evolution of its operating model and progress in its Mobile Networks and Cloud and Network Services at an investor and analyst progress update event in December.
These proposed changes are subject to local consultation requirements with employee representatives and Nokia’s social partners where applicable.
Nokia is a B2B technology innovation leader that creates secure, reliable, and sustainable networks. The company is focused on pioneering networks that can sense, think, and act by leveraging its work across mobile, fixed, and cloud networks. Nokia collaborates with service providers, enterprises, and partners worldwide to deliver digital services and applications of the future.
