2023-10-19 08:12:00
The year 2023 is confirmed to be complicated for Nokia. The Finnish telecoms giant recorded a 69% drop in profits in the third quarter compared to the previous year, to 133 million euros ($140 million), according to figures published this Thursday, October 19. Its sales fell by 20%, to 4.982 billion euros.
“In the third quarter, we saw an increased impact of macroeconomic challenges on our business,” CEO Pekka Lundmark confirmed in a statement.
Direct consequence: Nokia will reduce its workforce. The group has in fact announced its intention to reduce the current number of its employees from 86,000 to 72,000-77,000 people. “The most difficult decisions to make are those that impact our staff,” commented Pekka Lundmark.
The weight of 5G
Nokia is engaged in a battle for 5G networks with its Swedish rival Ericsson in particular. At the end of February, it was the latter who announced the elimination of 8,500 jobs worldwide, a few months after having implemented a major savings plan.
“Restless environment”, “climate of uncertainty”: Nokia and Ericsson are worried about 2023
Another player in the race: the Chinese Huawei. The two European groups have long suffered from the emergence of their Asian competitor on their markets, but have benefited in recent years from restrictive measures taken against the Chinese giant by several Western countries, led by the United States.
The fact remains that, since the start of 2023, Nokia and Ericsson have felt a drop in 5G investments from their customers, mobile telephone operators, in certain important markets, notably the United States and India. Confirmed this third trimester.
“We saw some slowdown in the pace of 5G deployment in India, meaning that growth there was no longer sufficient to offset the slowdown in North America,” said Pekka Lundmark. Börje Ekholm, CEO of Ericsson, for his part deplored “the adjustment of customer stocks, and a pace of deployment [ndlr : de la 5G] slower “.
Published this Tuesday, Ericsson’s figures are also not looking good for the third quarter of 2023. Its sales fell by 10% year-on-year, to 68 billion crowns (nearly 5.9 billion euros) . And the group recorded a colossal net loss of 2.6 billion euros.
Telecoms: Ericsson, the Swedish 5G champion, is still brooding
Hope for improvement
Nokia nevertheless expects ” an upgrade “ of its network activities “in the fourth trimester”. For the whole year, the Finnish group expects an evolution of its annual sales of between -4% and +2% at constant exchange rates, compared to an expected increase of +2 to +8% until in July. The 2023 operating margin should be between 11.5% and 13%, compared to a range of 11.5% to 14% initially planned. Forecasts revised downward following second quarter results.
Ericsson is less optimistic. Börje Ekholm expects fourth quarter to suffer “similar market trends”.
(With AFP)
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