Nokia to cut 14,000 jobs due to poor sales performance

WEB DESK: On Thursday, Nokia, the renowned phone manufacturer, revealed plans to slash up to 14,000 jobs as part of a cost-cutting strategy.

This decision follows a significant 20 per cent decline in third-quarter sales, primarily due to weakened demand for 5G equipment. The company expressed caution, indicating that a swift market recovery was not anticipated.

Nokia, a key player in the telecommunications equipment industry, experienced a 40 per cent decrease in net sales in Q3, particularly in the vital North American market.

This decline prompted the need for substantial cost-saving measures, including substantial job reductions. Nokia aims to achieve savings ranging from 800 million euros ($842 million) to 1.2 billion euros by 2026.

The slowdown in the United States, a major market for Nokia and Ericsson, pushed both companies to seek growth in other regions, like India. However, even India, which saw remarkable growth in 2022, is now expected to stabilise.

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Nokia’s Chief Executive, Pekka Lundmark, underscored the gravity of the market situation, prompting these decisive actions.

The company plans to streamline its employee base to between 72,000 and 77,000, down from 86,000, reflecting approximately 16 per cent job cuts at the highest estimate.

Lundmark refrained from divulging specific details, citing the need for initial consultations with employee representatives.

Nevertheless, he stressed the importance of safeguarding research and development efforts.

Nokia anticipates achieving savings of at least 400 million euros in 2024 and an additional 300 million euros in 2025.

Ericsson, facing similar challenges, acknowledged the persistent uncertainty in its business, which is expected to extend into 2024.