Nokia to Cut up to 14,000 Jobs after Sales Drop 20%

Telecommunications giant Nokia is set to cut up to 14,000 jobs worldwide, following a staggering 20% drop in sales. This move is seen as an attempt to stabilize their financial position and mitigate the impact of the decreased demand in the global markets.The Finland-based company has been dealing with a significant dip in sales, with a 20% fall reported. It has been contending with stiff competition from other tech giants and a generally challenging market environment. The job cuts are estimated to save the company nearly 600 million euros ($714 million) by the end of 2023.

"Nokia expects to act quickly on the program with at least 400 million euros of in-year savings in 2024 and a further 300 million euros in 2025," the company said.

Ericsson, which cut off thousands of staff in 2023, indicated on Tuesday that the business instability will continue into 2024.

"While our third-quarter net sales were impacted by the ongoing uncertainty, we expect to see a more normal seasonal improvement in our network businesses in the fourth quarter," Pekka Lundmark, the chief executive officer of Nokia, said

"Resetting the cost base is a necessary step to adjust to market uncertainty and to secure our long-term profitability and competitiveness," Mr Lundmark said.

Around 4,000 to 5,000 jobs out of the 14,000 job cuts will be from Finland alone, where the company is headquartered. The rest will be from its operations spread across various countries. This decision has left the employee community troubled and unions have expressed their concern over the large-scale layoffs.

Despite the massive job cuts, Nokia aims to ramp up investment in research and development and future capabilities including 5G, cloud and digital infrastructure as stated by their CEO, Pekka Lundmark. The company seeks to reposition itself in the highly volatile telecom market, and focuses on areas of high growth and margin.