Nokia To Slash 14,000 Jobs Amid ‘Market Uncertainty’
The Finnish telecom said that the job cuts, which will free up nearly $1.3 billion, will mostly come from its Mobile Networks, Cloud and Network Services business units, as well as within its corporate functions.
Finnish telecom giant Nokia said it will slash up to 14,000 jobs as the carrier attempts to make “strategic and operational” cost-cutting changes over the next couple of years.
Nokia, a maker of 5G and telecom equipment, said that these actions will “better position the company for longer-term growth and enable it to navigate the current market uncertainty” in a statement published Thursday.
The layoffs are expected to save nearly $1.3 billion in costs by the end of 2026. The cuts will reduce staffing expenses by 10 to 15 percent and save the company about $421.4 million in 2024 alone, the company estimated.
Nokia said that the cost savings are expected to primarily be achieved in its Mobile Networks, Cloud and Network Services business units, as well as within its corporate functions.
Nokia employs about 86,000 people globally. The cuts will leave the company with about 72,000 to 77,000 employees, Nokia said.
“The most difficult business decisions to make are the ones that impact our people. We have immensely talented employees at Nokia and we will support everyone that is affected by this process. Resetting the cost-base is a necessary step to adjust to market uncertainty and to secure our long-term profitability and competitiveness. We remain confident about opportunities ahead of us,” said the company’s President and CEO Pekka Lundmark in a statement.
The announcement of the layoffs came on the same day that Nokia reported worse-than-expected Q3 earnings results. Sales for its third fiscal quarter fell 15 percent compared to the year-ago quarter, which the company attributed to “macroeconomic uncertainty and higher interest rates” that continue to pressure operator spending.
Nokia’s mobile network sales fell 19 percent in Q3 2023, which the company said was due to a slowdown in the pace of 5G deployment in markets such as India.
The telecom market earnings season is in full gear with AT&T also announcing its results on Thursday. The Dallas-based carrier beat Wall Street’s expectations with modest overall revenue growth in its Q3 2023. AT&T’s Mobility segment revenue posted a 2 percent increase year over year and its Mobility Services revenue climbed 3.7 percent during the quarter.
Verizon is expected to report earnings on October 24 and T-Mobile on October 25.