Nokia Plans to Cut Costs by Eliminating Up to 14,000 Jobs

Finnish telecommunications company Nokia plans to cut between 9,000 and 14,000 jobs by the end of 2026 in order to reduce costs. The decision comes after the company reported a 20% decline in sales between July and September. Nokia attributed the decrease in revenue to sluggish demand for 5G equipment, particularly in North America. The company currently employs 86,000 people globally and has already eliminated numerous jobs since 2015. Nokia aims to reduce costs by €800m to €1.2bn ($695m to $1bn) by 2026. CEO Pekka Lundmark expressed the need for significant investments in network capabilities to support advances in cloud computing and artificial intelligence. Despite ongoing uncertainty, he believes there will be an improvement in their network businesses in the current quarter. Nokia, once the largest handset manufacturer, failed to anticipate the success of internet-enabled touchscreen phones and lost market share to competitors like Apple and Samsung. After selling its handset business to Microsoft, Nokia focused on telecoms equipment. In 2020, the company benefited from Huawei's exclusion from the UK's 5G networks by becoming the main equipment provider to BT. However, the 5G equipment industry has faced challenges as operators in the US and EU have reduced spending. Nokia and Swedish competitor Ericsson have tried to counter this by increasing sales in India, although the rollout of 5G has also slowed there. Ericsson recently reported a decline in sales and has also laid off numerous employees this year, with the uncertainty affecting its business expected to continue into 2024.