Nokia announces plans to slash 14,000 jobs amidst market challenges

In 2023, major tech players, including X (formerly Twitter), Amazon, Google, Microsoft, and Meta, have made significant job cuts, collectively letting go of over 50,000 employees. Recently, a report showed that Qualcomm will cut 1,258 positions across its San Diego and Santa Clara offices. However, this pales in comparison to Nokia's plans.

Nokia is set to cut up to 14,000 jobs as part of a major cost-cutting initiative aimed at addressing a "weaker" market environment, as reported by CNN. The Finnish telecom giant, known for being a major provider of 5G equipment with an 86,000-strong workforce, unveiled this move as part of a broader restructuring, which aims to reduce the headcount between 72,000 and 77,000 employees.

This move is expected to decrease staffing expenses by 10% to 15%, with a projected savings of at least $421.4 million in 2024 alone. Nokia anticipates cumulative cost reductions of nearly $1.3 billion by the end of 2026.

Nokia's CEO, Pekka Lundmark, acknowledged the difficulty of such decisions by saying: “The most difficult business decisions to make are the ones that impact our people."

The decision aligns with Nokia's recent financial performance, which fell short of expectations. In the third quarter, sales declined by 15% compared to the same period the previous year, attributed to macroeconomic uncertainty and increased interest rates impacting operator spending.

Mobile network sales experienced a 19% drop in the same quarter, reflecting a slowdown in 5G deployment in markets like India. Nokia's Swedish rival, Ericsson, echoed similar concerns, warning of lower-than-usual sales in the second half of 2023 due to a “challenging environment and macroeconomic uncertainty.”

In addition to all that, Nokia is also entangled in a patent dispute with Oppo, which caused delays in the release of the OnePlus Open, which is now finally official. Nokia is pursuing legal action, not only against Oppo but also OnePlus, and vivo in Europe, potentially impacting the availability of their products in the market.

Once a dominant player in the cell phone market, Nokia struggled to compete with the likes of Apple and Samsung in the smartphone era. After selling its mobile phone business to Microsoft in 2014 and buying it back in 2016, Nokia's smartphones are now produced by HMD Global Oy through a licensing agreement with Nokia Corporation.