Finnish telecommunications giant Nokia has revealed plans to lay off 14,000 employees following a 35% drop in profits this year, primarily due to the sluggish 5G market. This reduction amounts to 16% of its workforce. Nokia, once synonymous with mobile phones for those born in the 90s, previously underwent significant staff reductions in 2011 and 2020. The company’s latest restructuring phase aims to save €1.2 billion by 2026, with €400 million targeted by 2024, focusing on mobile networks, network services, cloud computing, and corporate functions.
Nokia’s CEO, Pekka Lundmark, stated that “growth in the Indian market can no longer compensate for losses in North America,” especially with China’s strong presence in the telecommunications sector. The company experienced a more significant impact from macroeconomic challenges during the third quarter. Nokia hoped that its 5G network deployment in India would offset the slowdown in telecom operator spending and declining sales, but these expectations were not met.
Nokia is not alone in facing the 5G market slowdown. Major global telecommunications equipment manufacturers, including Ericsson, have been affected. Ericsson was the first to announce the 5G slowdown and subsequently initiated global layoffs, cutting 8,500 jobs worldwide.
Nokia emphasized that the exact number of layoffs is not final and will adjust based on inflation trends. Lundmark affirmed that the corporation would take “decisive actions at strategic, operational, and cost levels” to navigate through these challenging times. The 5G market slowdown has also prompted other tech giants like Meta, Microsoft, Amazon, and Google to implement significant workforce reductions, reflecting the broader impact of this market shift on the technology industry.