Nokia To Axe Up To 14000 Jobs As Demand Shrinks

‘The move will help the company reduce staffing expenses by 10% to 15%’

Nokia To Axe Up To 14000 Jobs As Demand Shrinks

In an effort to combat a "weaker" business climate, Nokia plans to eliminate up to 14,000 positions, the company announced in a statement.

The announcement of the action was made as part of a larger reorganization that would reduce the company's workforce to between 72,000 and 77,000 employees. The Finnish telecom giant, a significant supplier of 5G equipment, employs 86,000 workers.

According to the company's projections, the move will enable it to decrease employment expenditures by 10% to 15% and save at least €400 million ($421.4 million) in 2024 alone.

Overall, it stated that by the end of 2026, the reductions are anticipated to reduce Nokia's expenses by up to €1.2 billion (about $1.3 billion). Nokia (NOK) promised to "act quickly" to implement the adjustments.

CEO Pekka Lundmark stated in the statement, "The most difficult business decisions to make are the ones that impact our people." "Everyone impacted by this process will receive support from Nokia, as we have incredibly talented staff members."

The news was released on the same day that Nokia revealed lower-than-anticipated earnings. It stated that because of "macroeconomic uncertainty and higher interest rates continuing to pressure operator spending," revenues in the third quarter were 15% lower than they were during the same period last year.

The business said that a slowdown in the pace of 5G implementation in areas like India was the reason why mobile network revenues dropped 19% in the third quarter over the same period last year.

This week, rival Swedish company Ericsson issued a similar warning, citing a "challenging environment and macroeconomic uncertainty" to support Nokia's prediction that sales in 2023 would probably be lower than typical in the second half.

However, Nokia has not changed its prediction for 2023, estimating revenues for the entire year to range between €23.2 billion and €24.6 billion ($24.4 billion and $25.9 billion).

According to Lundmark, "We continue to believe in the mid-to-long-term attractiveness of our markets."