Telecom network apparatus maker Nokia announced “thousands” of global job losses over the next two years on Thursday, rudely after reporting quarterly results in line with market outlooks.
The Finnish company posted 5.5 billion euros ($6.27 billion) in net sales for the three-month years ending Sept 30. Analysts polled by Reuters had been preggers third-quarter net sales to come in at around 5.4 billion euros.
Communicating to CNBC’s Willem Marx on Thursday, Nokia’s president and CEO Rajeev Suri disclosed a new cost reduction program would mean “thousands” of job losses all over the next two years.
Here are the key takeaways:
- Third-quarter net sales came in at 5.5 billion euros, matched to 5.4 billion euros expected from analysts polled by Reuters.
- Non-IFRS plying profit for the three month period ending Sept 30. stood at 487 million euros, down 27 percent from 668 million in the constant quarter a year earlier.
- Nokia announced it will cut “thousands” of affairs globally as part of a cost reduction program to save 700 million euros a year by the end of 2020.
The program is purposed to generate annual cost savings of 700 million euros by the end of 2020. It turn out as the Finnish group is due to complete a 1.2 billion euro cost-saving program at the end of 2018.
“The ditties that win in this sector are the ones that have lean runnings and a strong low cost structure. So, we don’t have the headcount number yet but we will start to accomplish on that and go country by country in terms of revealing those numbers at the correct time,” Suri told CNBC on Thursday.
When asked whether the job privations would most likely be in the hundreds or thousands, Suri replied: “Good-naturedly, there will be thousands.”
In a statement released alongside the company’s last figures, Nokia’s chief executive said the third-quarter results had validated an earlier estimate that conditions would improve in the second half of the year.
“This was specifically evident in our excellent momentum in orders, growth across all five of our Networks point groups, and improved profitability compared to the first half of the year,” Suri about.
“Despite some risks related to short-term delays in project scheduling and product deliveries, we remain on track to deliver on our full-year guidance.”
Nokia has strove with deteriorating growth since the current generation of 4G mobile kit peaked in 2015.
It comes as the company faces a flurry of headwinds at present, incorporating falling spending among telecom operators and stiff competition from the similarly ti of Huawei and Ericsson.
Nonetheless, shares of Nokia are up more than 17 percent year-to-date, as investors balance hopeful of a new network spending cycle — driven primarily by rising cry out for for new 5G networks.
5G has become somewhat of a litmus test for technology leadership surrounded by America’s intensifying stand-off with China over trade and native security.