Nokia announces plans to slash 14,000 jobs amidst market challenges،
In 2023, major tech players including X (formerly Twitter), Amazon, Google, Microsoft, and Meta made significant job cuts, collectively laying off more than 50,000 employees. Recently, a report showed that Qualcomm would cut 1,258 positions in its San Diego and Santa Clara offices. However, this pales in comparison to Nokia’s plans. Nokia is set to cut up to 14,000 jobs as part of a major cost-cutting initiative aimed at responding to a “weaker” the market environment, as reported CNN. The Finnish telecommunications giant, known for being a major supplier of 5G equipment with 86,000 employees, unveiled the move as part of a broader restructuring, which aims to reduce the workforce by between 72,000 and 77,000 employees.
The move is expected to reduce personnel costs by 10 to 15 percent, with projected savings of at least $421.4 million in 2024 alone. Nokia projects cumulative cost reductions of nearly $1.3 billion by the end of 2026.
Nokia CEO Pekka Lundmark acknowledged the difficulty of such decisions, saying: “The most difficult business decisions to make are those that impact our people.“.
The move aligns with Nokia’s recent financial performance, which has failed to meet expectations. In the third quarter, sales decreased by 15% compared to the same period last year, due to macroeconomic uncertainty and rising interest rates impacting operator spending.
Mobile network sales saw a 19% decline in the same quarter, reflecting a slowdown in 5G deployment in markets like India. Nokia’s Swedish rival Ericsson echoed similar concerns, warning of lower-than-normal sales in the second half of 2023 due to a “challenging environment and macroeconomic uncertainty.”
On top of all this, Nokia is also embroiled in a patent dispute with Oppo, which has led to delays in the release of the OnePlus Open, which is now finally official. Nokia is taking legal action, not only against Oppo but also against OnePlus and Vivo in Europe, which could impact the availability of their products in the market.
Once a dominant player in the mobile phone market, Nokia struggled to compete with Apple and Samsung in the smartphone era. After selling its mobile phone business to Microsoft in 2014 and repurchasing it in 2016, Nokia’s smartphones are now produced by HMD Global Oy under a licensing agreement with Nokia Corporation.
