Nokia announced plans to cut job and bring automation as part of the strategy to cut cost – targeting to save 700 million euros by 2020.
Nokia posted 1 percent drop in revenue to 5.458 billion euros and operating loss of 54 million euros in Q3 2018.
Nokia said it aims to reduce its annualized operating expenses by 500 million euros and production overheads by 200 million euros by the end of 2020 compared to the end of 2018.
The Finland-based telecom technology company did not reveal more information the job cut and the impact on its employees.
Nokia will make investments in digitalization to drive more automation and productivity; further process and tool simplification; significant reductions in central support functions to reduce cost.
Nokia will give priority for R&D programs to create long-term value. There will be a sharp reduction in R&D spending in legacy products.
“These planned changes are expected to result in a net reduction of employees globally. The one-time cost of implementing these planned changes is 900 million euros,” Nokia said on Thursday.
Nokia will be creating a new Enterprise Business Group under Kathrin Buvac. She is the chief strategy officer for Nokia and has led the company strategy through significant transformations over the last five years.
“The plan we are announcing is the logical step to take as the completion of our Alcatel-Lucent-related cost saving program draws near,” said Rajeev Suri, president and CEO of Nokia.
Nokia aims to achieve non-IFRS operating margin of 12-16 percent and diluted earnings per share guidance of EUR 0.37 – 0.42 in 2020.
