The Finnish telecommunications company Nokia announced this Thursday that it will lay off 14,000 employees by 2026. The increase in economic difficulties and the 5G war are some of the causes cited.
“Our performance in the third quarter demonstrated our resilience. (….) Over the last three years we have invested to reinforce our technological leadership, which has given us a solid foundation to withstand this period of market weakness,” he begins by highlighting by Nokia CEO Pekka Lundmark in a statement posted on the company’s website.
“However, given the uncertain times, we are taking decisive measures at a strategic, operational and cost level,” he adds.
Last quarter’s balance sheet results show that sales fell 20% compared to the same period in 2022, citing “macroeconomic challenges” and “high interest rates” as the main reasons. In addition, the group recorded a 69% drop in profit, to 133 million euros, compared to the previous year.
Although the company continues to “believe in its medium and long-term recovery capacity”, given the figures presented, Nokia will lay off one in five of its 72,000 current workers between now and 2026. According to the same statement, the savings strategy foresees cost reductions of up to €1.2 billion by 2026, in particular targeting mobile networks as well as network and cloud services.
“The hardest decisions to make are those that affect our team,” says Pekka Lundmark.
The official also explains that Nokia experienced “some slowdown in the pace of 5G deployment in India, meaning the growth was no longer enough to offset the slowdown in North America.”
Nokia expects “an improvement” in its network activities “in the fourth quarter.”
Source: TSF
