Finnish telecommunications company, Nokia, is planning to cut 14,000 jobs to reduce costs, after suffering a 20% drop in third-quarter sales due to weaker demand for 5G equipment.
Nokia has experienced a slowdown in the United States, which is among its more profitable markets. Rivals like Ericsson had forced them to seek growth in other regions such as India, however India is also expected to normalize after a stellar 2022.
“The market situation is really challenging and it is witnessed by the fact that in our most important market, which is the North American market, our net sales are down 40% in Q3,” Nokia Chief Executive Pekka Lundmark said in an interview.
Reuters reported that Nokia is targeting savings of between 800 million euros ($842 million) and 1.2 billion euros by 2026. To achieve this, the company expects to reduce its employee base from 86,000 to between 72,000 and 77,000 employees. That will be around 16% job cuts at the high end.
Nokia expects at least 400 million euros of savings in 2024, and a further 300 million euros in 2025.