Nokia announced major changes to its business on Thursday, including cutting 14,000 jobs or about 16 percent of its workforce over the next three years.
The company employs 86,000 people and said, “resetThis would reduce its cost to 1.2 billion euros, or about $1.3 billion. It made the announcement as it reported a 20 percent decline in sales and a 69 percent decline in profits in the most recent quarter from July to September compared to last year.
“In the face of a challenging market environment, we will reduce our cost base to protect our profitability,” company Chief Executive Pekka Lundmark said in a statement. video statement,
Nokia once led the global mobile phone market, but it was soon overtaken by the iPhone, which was released by Apple in 2007. Nokia sold its mobile phone division to Microsoft in 2013. Since then, it has focused on selling back-end infrastructure for telecommunications systems to wireless companies, cable operators, and other commercial buyers.
Nokia said sales and profits declined in its latest quarter Because “widespread economic uncertainty and high interest rates are putting pressure on its customers”. The company is also struggling after losing market share in 5G technology to rivals in China, according to John Strand, a Copenhagen-based telecommunications analyst. Chinese companies, led by Huawei, control nearly half of the global 5G market.
Nokia halted sales in Russia in March 2022 following Russia’s invasion of Ukraine. At the time, the company was selling equipment to MTS, Russia’s largest telecommunications service provider. Documents obtained by The New York Times revealed that Nokia had been enabling Russian surveillance systems for nearly a decade.
Nokia is not the only Western telecommunications group facing cutbacks: one of its main competitors, Sweden’s Ericsson, has also laid off thousands of employees this year due to low demand for its products and services.
“Nokia’s problems are almost the same for all Western operators. They are affected by rising energy prices, inflation and interest,” Mr Strand said.