Nokia Layoffs: Severance Pay Insights

Nokia Layoffs: Severance Pay Insights

Nokia to layoff 14,000 employees

Nokia, a prominent telecom equipment manufacturer, has unveiled plans to trim its global workforce by up to 14,000 employees, which accounts for 16% of its total workforce. This move comes in response to the sharp decline in third-quarter sales and profits. The Finnish company is committed to streamlining operations to enhance efficiency and tackle the prevailing market uncertainties.

In pursuit of these goals, Nokia aims to significantly reduce its cost base by 800 million to 1.2 billion euros by the end of 2026. This financial optimization plan will lead to a workforce reduction from its current 86,000 employees to a range of 72,000 to 77,000 within that timeframe.

During the third quarter, Nokia witnessed a substantial drop in sales, plummeting by 20% to 4.98 billion euros from the previous year’s 6.24 billion. The comparable net profit also suffered, falling to 299 million euros from 551 million in the July-to-September quarter a year earlier. The mobile networks division, Nokia’s largest unit by revenue, recorded a 24% decline, primarily driven by a weakened North American market, leading to a 64% drop in operating profit.

Nokia’s CEO, Pekka Lundmark, expressed unwavering confidence in the long-term potential of their markets. He emphasized that investments in networks with improved capabilities are essential for the realization of cloud computing and AI revolutions. While the timeline for market recovery remains uncertain, Nokia is taking decisive actions on strategic, operational, and cost levels to emerge stronger and deliver substantial value to its shareholders.

Nokia stands as a major player in the 5G technology arena, along with Ericsson, Huawei, and Samsung. In a similar cost-cutting move earlier this year, Ericsson announced an 8% reduction in its global workforce.

Severance pay for Nokia’s employees

Nokia employees facing termination may be eligible for severance pay of up to 24 months, contingent on various factors. In Canada, severance pay serves as compensation for non-unionized workers who are terminated without just cause. Even if an employee’s termination is deemed to be for cause, there may still be a potential entitlement to full severance pay.

At Whitten & Lublin, we recognize that dealing with job loss or termination can be a daunting and stressful experience. Our team of experienced employment lawyers is here to assist you in understanding your legal options and ensuring that you receive the appropriate compensation. We encourage individuals impacted by recent layoffs in Canada to reach out for a consultation, which can be arranged online or by phone at (416) 640-2667 today.