INTERNATIONAL NEWS
By the end of 2026, Nokia, a major Finnish telecom company, will eliminate between 9,000 and 14,000 jobs in order to cut costs.
The declaration was made as the business revealed a 20% decline in sales from July to September.
The business put the decline in 5G equipment demand in markets like North America.
Currently employing 86,000 people worldwide, it has cut thousands of positions since 2015.
By 2026, Nokia hopes to reduce costs by €800 million to €1.2 billion (£695 million to £1 billion).
Due to rising interest rates and inflation, it said that its consumers had been reducing their expenditure.
According to chief executive 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 stated.
It declared that it aimed to “act quickly” by reducing expenses by €400 million in 2024 and €300 million in 2025.
Despite “ongoing uncertainty,” Mr. Lundmark continued, Nokia anticipated “an improvement in our network businesses” in the current quarter.
The business opted not to disclose where the job cuts would occur or whether they would effect staff in the UK.
According to the statement, the changes were “a difficult business decision,” but they were “an essential step to address the market’s ambiguity and safeguard our long-term profitability and competitiveness.”
“We have immensely talented people at Nokia and we will support everyone that is affected by the process,” stated a spokeswoman. “We are now beginning the process of consultation on initial reductions.”
Final job cuts “will be decided only after careful consideration, and will depend on the evolution of end market demand,” the spokeswoman stated.
5G lagging
After failing to predict the popularity of internet-enabled touchscreen phones like Apple’s iPhone and Samsung’s Galaxy, Nokia lost its position as the largest cellphone manufacturer in the world.
Nokia focused on telecom equipment after selling its handset division to Microsoft, which the software giant later wiped down.
It specializes in 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 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.
But as operators in the US 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 let go of thousands of workers this year, announced on Tuesday that the uncertainty affecting its operations would last until 2024.
The telecom industry ought to be “flying high, buoyed by unwavering demand for its services,” claims CCS Insight analyst Kester Mann.
“Instead, countless questions continue to be posed around operators’ relevance and long-term future,” he stated.
Due to issues including inflation and rising interest rates, residential and commercial clients have been reducing their expenditure, 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.
A number of companies have made redundancies, including Meta, the owner of Facebook and Instagram, Amazon, and X, formerly known as Twitter.
Tech professionals are still in demand, though.
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