Nokia to axe up to 14,000 jobs to cut costs

The statement came after the business revealed a 20% decline in sales from July to September. The business attributed the decline in 5G equipment demand to regions like North America. It presently has 86,000 employees worldwide and has eliminated countless jobs since 2015. Between 2026, Nokia hopes to reduce expenses by €800 million to €1.2 billion (£695 million to £1 billion). Due to the expanding rate of interest and inflation, it said that its consumers had been reducing their spending. According to CEO Pekka Lundmark, advances in cloud computing and AI would necessitate “significant investments in networks that have vastly improved capabilities.” “However, given the uncertain timing of the market recovery, we are now taking decisive action,” he continued. It declared that it aimed to “act quickly” by reducing expenses by €400 million in 2024 and €300 million in 2025. Nokia projected “an improvement in our network businesses” in the current quarter, Mr. Lundmark continued, despite “ongoing uncertainty.” The corporation opted not to disclose the precise location of the job losses or if UK workers would be affected. In order to respond to market volatility and safeguard our future earnings and competitiveness, the layoffs had been a “difficult business decision,” according to the statement. “We possess tremendously talented individuals at Nokia and we intend to help everyone that is affected by the procedure,” claimed a spokeswoman. “The process of consultation on initial reductions has only recently begun. The final job cuts’ timing and specifics “will be determined only after thorough investigation and will depend on the development of end market demand,” a representative pointed out.

Nokia was formerly the largest cellphone vendor in the world, however, it was dethroned from its throne by competitors after failing to foresee the growing appeal of internet-enabled touchscreen phones like Apple’s iPhone and Samsung’s Galaxy. Nokia focused on telecom equipment after selling its handset division to Microsoft, which the software powerhouse later wiped down. It concentrates on software and hardware for the telecommunications industry, including base stations and antennas, as well as the physical and cloud infrastructure that people use to make and receive phone calls and access the internet. In the year 2020, Nokia benefited significantly from Huawei’s exclusion from the UK’s 5G networks as a result of an agreement it made to become the biggest equipment supplier to BT.

Nevertheless as providers in both the United States and the EU curb spending, 5G equipment manufacturers have been having trouble. Increased sales to India have been an attempt by Nokia and its Swedish rival, Ericsson, to make up for some of the shortfall, although 5G implementation has also been sluggish there. This week’s earlier Ericsson sales report indicated a decline. The company, which has dismissed tens of thousands of workers this year, announced on Tuesday that the lack of clarity affecting its operations would continue until 2024. According to CCS Insight analyst Kester Mann, the telecom sector should be “flying high, buoyed by unwavering demand for its services.”

Due to issues including inflation and rising interest rates, residential and commercial clients have been reducing their expenditures, which has caused technology companies, especially telecoms providers, to struggle. Over the last two years, it has caused thousands of workers to lose their employment globally. Redundancies have been made by a number of businesses, including Meta, the owner of Facebook and Instagram, Amazon, and X, formerly known as Twitter. Technological specialists are still in demand, though 80% of big information technology workers who lost their positions were able to find new employment within three months, according to the job posting site Zip Recruiter.