Nokia Plans to Slash Up to 14,000 Jobs Amid 5G Demand Slump
Nokia plans to cut up to 14,000 jobs by 2026 amid falling sales and shifting tech demands. The company promises support for impacted employees. Nokia, the Finnish telecommunications conglomerate, has announced plans to eliminate up to 14,000 positions by 2026 as a strategic move to streamline costs. The move comes amid a 20% drop in sales from July to September due to falling 5G equipment demand in North America. The company's goal is to reduce expenses by €800m to €1.2bn within the next five years. Despite ongoing market uncertainties, CEO Pekka Lundmark expects an upturn in Nokia’s network businesses in the current quarter. The job cuts, including their distribution and potential impact on UK employees, were not disclosed. However, the company's portfolio includes software and hardware used in telecoms, including the physical and cloud infrastructure used for phone calls and internet services.
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Nokia, the Finnish telecommunications conglomerate, has revealed plans to eliminate between 9,000 to 14,000 positions by 2026 as a strategic move to streamline costs. This decision was unveiled against a backdrop of a 20% sales tumble from July to September, attributable to sagging 5G equipment demand, particularly in markets such as North America.
Presently, Nokia’s global workforce stands at 86,000, a number that has suffered noticeable retrenchments since 2015. The company’s goal is to slash expenses by €800m to €1.2bn (£695m-£1bn) in the next five years. The decision comes amid a cautious economic environment, prompting customers to tighten their purse strings due to surfaced inflation and interest rate concerns.
The company anticipates that emerging developments in cloud computing and artificial intelligence will necessitate significant investments in highly advanced networks, according to CEO Pekka Lundmark. “Given the uncertain timing of the market recovery, we are now taking decisive action,” he added. The firm has expressed an intention to “act quickly”, eyeing a cost reduction of €400m by 2024, and €300m in 2025.
Despite ongoing market uncertainties, Lundmark stated he expected an upturn in the company’s network businesses in the current quarter. The specifics of the job cuts, including their distribution and potential impact on UK employees, were not disclosed. These cuts, while a challenging business decision, are deemed essential adjustments to market unpredictability and crucial for securing long-term profitability and competitiveness.
“Despite the challenges, we at Nokia are committed to supporting all impacted individuals throughout this transition,” relayed an official spokesperson. Initial consultation on the initial job reductions is set to begin, with the timing and final job cut specifics to be finalized following thorough deliberation, all contingent on the trajectory of end market demand.
Nokia, once the heavyweight of the global handset manufacturing industry, lost its top spot to rivals when it failed to predict the advent of internet-enabled touchscreen phones such as the iPhone and Galaxy series. Following the sale of its handset business to Microsoft, Nokia shifted its focus to telecoms equipment. The company’s portfolio includes software and hardware used in telecoms, including the physical and cloud infrastructure used for phone calls and internet services.
Yet, the road ahead appears laden with challenges. The prohibitive Huawei from the UK’s 5G networks paved the way for Nokia’s deal to become BT’s largest equipment provider in 2020. However, declining spending by operators in the US and the EU has sparked difficulty among 5G equipment manufacturers, with rivals like Sweden’s Ericsson also feeling the impact.
Kester Mann, an analyst at CCS Insight, envisions the telecoms industry reaching new heights buoyed by incessant demand for its services. However, lingering queries related to the operators’ importance and their long-term prospects sustain. Amid macroeconomic concerns like inflation and interest hikes, both individual and business customers are streamlining expenditure, triggering job losses worldwide in the past couple of years. Major tech firms, including Meta, Amazon, and X, have confirmed redundancies. Though, the market for tech workers remains resilient.
Data from recruitment firm Zip Recruiter indicates that 80% of tech employees who lost their jobs managed to secure employment within three months. It’s a silver lining, underscoring the redefining nature of job sustainability amid prevalent economic challenges.
Konular: 5G, Nokia