Nokia announced job cuts as part of a cost savings programme designed to shed €700 million from its operating and production expenditure by end-2020, as it revealed a reduction in its net loss for the third quarter.

In a statement, the Finland-based vendor said €500 million of the targeted cost cutting is expected to come from reductions in operating expenses.

“Nokia plans for these savings to come from a wide range of areas, including investments in digitalisation to drive more automation and productivity…the consolidation of selected cross-company activities; and further reductions in real estate and other overhead costs,” it stated, adding the “planned changes are expected to result in a net reduction of employees globally” although the details of this have not yet been decided.

CEO Rajeev Suri said the plan “is the logical step to take as the completion of our Alcatel-Lucent-related cost saving programme draws near”. That programme aimed at savings of €1.2 billion.

“Even if these actions are right for our business, we do not take them lightly given the expected impact on our employees. We will strive to do right for those people affected by the planned changes, acting transparently and providing transition and support to those who need it,” Suri stated.

Turning his attention to the next-generation technology, Suri said: “Our early progress in 5G is extremely strong, we continue to increase our investment in this critical technology, and our win rate for new deals suggests that we are in a very good competitive position.”

In the future it plans to build on its momentum in 5G by putting the focus of the Mobile Networks Business Group on mobile radio products.

The vendor seperately announced its Chennai factory in India has begun manufacturing 5G radio equipment, which it said makes the facility the first in the country to do so. The plant already produces 2G, 3G and 4G equipment for the Indian market and more than 100 other countries.

During the third quarter, Nokia reduced its net loss attributable to shareholders from €183 million in the 2017 period to €79 million, while net sales of €5.4 billion were down marginally from €5.5 billion in Q3 2017.

“Nokia has made considerable progress in executing on its strategy, with excellent momentum in providing high-performance end-to-end networks, targeting new enterprise segments and creating a standalone software business,” Suri commented.

More than half of the earnings were generated by Nokia’s patent licensing business.

The vendor today separately announced it had extended a patent licence agreement with Samsung, which was due to expire at the end of 2018.

Maria Varsellona, Nokia chief legal officer and president of Nokia Technologies said: “This agreement demonstrates the strength of our patent portfolio and our leadership in R&D and licensing for cellular standards including 5G.”