Nokia to cut 14,000 jobs amid declining profits

The Finnish telecom firm aims to cut costs in response to a decrease in demand for mobile network equipment.

Nokia plans to trim its workforce by as many as 14,000 employees over the next three years due to lower-than-expected demand for its mobile network equipment. The Finnish tech company aims to achieve €1.2 billion in cost savings by the end of 2026, representing a 16% reduction from its current 86,000-strong global workforce. This workforce reduction decision coincided with a 70% decline in third-quarter profits, falling to €133 million (£116 million) from €428 million the previous year. Pekka Lundmark, Nokia’s CEO, acknowledged the difficulty of such choices and underscored their commitment to supporting affected employees given the company’s highly skilled workforce.

“Realigning our cost structure is a crucial step to adapt to market unpredictability and ensure our sustained profitability and competitive edge. We maintain confidence in the opportunities that lie ahead.”

Nokia, headquartered in Espoo, Finland, did not specify the specific locations for the job reductions. The company currently employs approximately 37,700 individuals in Europe, including the UK, where it has offices in Bristol, Cambridge, and Reading. Job cuts are also expected to impact its US operations, where it has around 10,500 staff across offices in Chicago and Dallas.

Nokia stated that the extent of the cost-cutting initiative would be contingent on product demand. Nevertheless, it anticipates taking swift action to achieve savings of up to €400 million in the next year and an additional €300 million by 2025.

The company also highlighted that the overall mobile networks market is projected to witness a 9% decrease in demand this year, a substantial shift from previous forecasts of a 2% decline.

This drop in sales was linked to decreased demand in several countries, particularly in India, where Nokia pointed out that the pace of the country’s 5G deployment had decelerated and was no longer adequate to offset the downturn in North America.