Nokia is planning to lat off a large number fits staff globally as the company now preparing for the fifth-generation networks, said the company on Thursday.
While no details on the actual number of employees that the company was looking to lay off was provided by it, according to Dow Jones Newswires, the lay offs would be a part of the company’s mew strategy to save $799 million every year by the end of 2020.
The company also additionally would strive to further reduce real estate and other overhead costs, prioritize research-and-development programs, find software efficiencies and invest in digitalization to help productivity.
The company made the announcements during its presentation of third quarter results in which the company announced a profit that was over the expectations of the market.
Even as there is a momentum in 5G orders, there was increase in sale revenues in some of its networks business which reported a turnaround from a negative trend.
There was growth reported across all of the five networks business groups of Nokia and each of them also bettered on their profitability. However lower prices continued to put pressure on profit margins.
The operating margin in Nokia ‘s networks business fell to 5.0% from 6.9%.
Nokia said commercial 5G deployments are still expected to start near the end of the year.
The net sale reported by the Finnish company was 5.5 billion euros during the quarter. The figure was slightly over the estimates of analysts of around 5.4 billion euros.
A new cost reduction program would mean “thousands” of job losses over the next two years, said Nokia’s president and CEO Rajeev Suri, during an interview with CNBC.
The costs that would be saved by the new program would be over and above a 1.2 billion euro cost-saving program by the Finnish group which is scheduled to come to an close by the end of 2018.
“The ones that win in this sector are the ones that have lean operations and a strong low cost structure. So, we don’t have the headcount number yet but we will start to work on that and go country by country in terms of revealing those numbers at the right time,” Suri told CNBC on Thursday.
“Well, there will be thousand,” he said when he was asked about the specific number of employees likely to be laid off.
A statement from the company said that the third quarter results an earlier forecast by the company that there would be a positive change in the second half of the current year.
“This was particularly evident in our excellent momentum in orders, growth across all five of our Networks business groups, and improved profitability compared to the first half of the year,” Suri said.
“Despite some risks related to short-term delays in project timing and product deliveries, we remain on track to deliver on our full-year guidance.”
(Adapted from FoxNews.com and CNBC.com)