Finnish company Nokia is shedding at least 10% of its staff following disappointing third-quarter results. The telecommunications sector is experiencing a decline in activity globally, resulting in thousands of job losses.
Telecommunications giant Nokia has announced that it will soon cut between 11,000 and 14,000 jobs, due to the decline in mobile infrastructure activities around the world.
Nokia faces a decline in investments from North American 5G operators: “In the third quarter, we saw an increased impact of macroeconomic challenges on our business”said the company’s CEO, Pekka Lundmark, in a press release published Thursday.
In the third quarter, the company’s profit decreased by 69% compared to the same period last year.
The cost-cutting program will lead the company to shed thousands of employees, going from 86,000 to 77,000 in the best case scenario, or 72,000 in the worst case scenario.
Nokia’s plan is to save up to €1.2 billion in spending by 2026 by targeting mobile network and cloud costs.
The Finnish giant expects positive signs from the next quarter.
Global slowdown in telecommunications technology
Telecom giants are facing challenges around the world, following a decline in 5G-related expansion and activities.
“We saw some moderation in the pace of 5G deployment in India, meaning growth there was no longer sufficient to offset the slowdown in North America”explains Pekka Lundmark.
Ericsson, Nokia’s Swedish competitor, has warned in recent months of a reduction in investments by mobile operators, linked to the global economic context.
Ericsson is also shedding 8,500 employees and similar situations are happening in the US, with Microsoft and Meta cutting their workforces by at least 10,000 people each. Amazon lays off 18,000 jobs and Google’s Alphabet gets rid of 12,000 jobs.
The sector’s profits have increased during the COVID-19 pandemic, but the telecom technology industry is now facing drastic staff reduction measures “to protect profitability”, as Nokia said in its statement.