In a strategic move to streamline operations and cut costs, Finnish telecom giant Nokia is set to reduce its global workforce by a significant 9,000 to 14,000 jobs by the close of 2026. The decision follows a challenging third quarter, where the company reported a 20% decline in net sales to €4.98 billion (£4.34 billion), attributing the job cuts to a slowdown in demand for 5G equipment. Profits plummeted by a striking 69% year-on-year to €133 million.

Nokia has outlined an ambitious plan to curtail costs by €800 million to €1.2 billion by 2026, with CEO Pekka Lundmark emphasising a swift approach – aiming to slash costs by €400 million in 2024 and an additional €300 million in 2025. Lundmark highlights the necessity of substantial investments in networks with advanced capabilities, citing the upcoming revolutions in cloud computing and AI. He expresses optimism about an improvement in network businesses for the current quarter, remaining confident in the fundamental drivers of Nokia’s business.

Nokia has outlined an ambitious plan to curtail costs by €800 million to €1.2 billion by 2026

The telecom giant, once a mobile phone manufacturing titan, shifted its focus to telecoms equipment after selling off its handset business. With approximately 86,000 employees worldwide, Nokia has been implementing job cuts since 2015, and the current move aligns with its evolving business strategy.

In 2020, Nokia secured a deal with BT, becoming its largest 5G equipment provider following Huawei’s exclusion from the UK’s 5G networks. However, the 5G sector has witnessed a global spending cut among operators in the US, India, and the EU.

Nokia’s Swedish counterpart, Ericsson, is also grappling with challenges, reporting a decline in sales and laying off thousands of workers this year. In February, Ericsson announced a global cut of 8,500 jobs, with field services in the US being outsourced to external providers starting October 1.