Finnish company Nokia is letting go of at least 10% of its staff, following disappointing third quarter results. The telecoms sector is experiencing decreased activity globally, resulting in thousands of job cuts.
Telecommunication giant Nokia has announced it will soon cut between 11,000 and 14,000 jobs, as mobile infrastructure activities slump around the world.
Nokia is facing lower investments from Northern American 5G operators. "In the third quarter we saw an increased impact on our business from the macroeconomic challenges," said the company’s CEO Pekka Lundmark in a statement released on Thursday.
In the third quarter, the company’s profit decreased by 69% compared to the same time last year.
The cost-reducing programme will lead the company to let go of thousands of employees, going from 86,000 workers to 77,000 at best, or to 72,000 in the worst-case scenario.
Nokia’s plan is to save on spending costs, up to €1.2 billion by 2026, by targeting mobile and cloud networks costs.
The Finnish giant expects positive signs to show as soon as next quarter.
Global telecoms tech slowdown
Telecommunication giants are going through difficulties across the world, following a decrease of 5G-related expansion and activities.
"We saw some moderation in the pace of 5G deployment in India which meant the growth there was no longer enough to offset the slowdown in North America," Lundmark said.
Nokia’s Swedish competitor Ericsson has warned these past months about a decrease in mobile operators’ investments, linked to the global economic context.
Ericsson is also letting go of 8,500 employees and similar situations are taking place in the US, with Microsoft and Meta reducing its workforce by at least 10,000 people each. Amazon is making 18,000 positions redundant, and Google’s Alphabet is getting rid of 12,000 positions.
The sector’s profits jumped during the COVID-19 pandemic, but the telecommunication technology industry is now faced with drastic staff reduction measures “to protect profitability,” as Nokia explained in its statement.