Finnish telecoms equipment maker Nokia forecasts profit margins to pick up to 10-13 per cent in 2023, as new CEO Pekka Lundmark ramps up efforts to deliver 5G networks.
Strategy difficulties during the early phase of the 5G plan have led Nokia to fall behind Sweden’s Ericsson and China’s Huawei in the battle for work on next generation networks.
Lundmark, who took over in August, has introduced a new operating model with four business groups, cut his leadership team to 11 from 17 and plans to reduce employee numbers by up to 10,000 in the next two years.
Nokia currently has around 90,000 employees.
“We have a clear and detailed plan for how we will reset the business, accelerate competitiveness and scale up our lead in the markets we choose to play in,” Lundmark said.
“This plan will enable us to deliver double-digit comparable operating margins in 2023,” he added.
In October, Nokia had cut its 2020 operating margin guidance to 9 per cent from 9.5 per cent and for 2021 forecast a margin of 7 to 10 per cent.
The company said its board would assess the chances of proposing a dividend for 2021 after the fourth quarter.
Nokia’s shares fell 1 per cent despite its forecast rise.