Nokia To Cut 14,000 Jobs As Profits Slide

In response to the diminishing demand for its 5G equipment in North America, Finnish telecom behemoth Nokia revealed on Thursday its intention to slash up to 14,000 jobs. This development is the latest in a string of layoffs within the tech sector, which had experienced a surge in demand during the COVID-19 pandemic lockdowns. Nokia's CEO, Pekka Lundmark, acknowledged the impact of macroeconomic challenges on their business in the third quarter, citing the need for restructuring measures. The company's cost-cutting program aims to bring staffing levels down to as low as 72,000, with expected cost reductions of up to 1.2 billion euros ($1.14 billion) by 2026. The initiative will primarily affect business areas like Mobile Networks, Cloud and Network Services, and corporate functions. Lundmark emphasized the difficulty of making decisions that directly impact their workforce while announcing the layoffs. In the third quarter, Nokia reported a significant decline in profits, with earnings at 133 million euros, marking a 69 per cent drop from the same period a year ago. This disappointing performance, coupled with an uncertain outlook, raised concerns among analysts. Atte Riikola, an analyst at equity analysis firm Inderes, expressed reservations about Nokia's short-term prospects, suggesting the possibility of a negative profit warning. Despite these challenges, Nokia remains cautiously optimistic about an "improvement in our network businesses in the fourth quarter," as stated in their report. However, Riikola anticipates that Nokia may need to revise its estimates significantly in the near future.