Helsinki, Finland: Nokia, the renowned Finnish telecommunications network equipment manufacturer, recently announced a significant 20% decline in quarter-over-quarter sales. In response to this adverse development, the company has decided to lay off 14,000 employees, which represents over 15% of its entire workforce.
According to Nokia’s CEO, this drastic measure is in response to a 40% drop in sales of 5G equipment in North America, with other major markets experiencing similar deceleration in growth. These workforce reductions are expected to yield cost savings of 400 million euros by the close of 2024 and an additional 300 million euros in 2025, as per the company’s estimations.
The United States stands as one of the primary markets for Nokia, along with fellow network equipment provider Ericsson. While both companies anticipate a seasonal upturn in the coming quarter, overall uncertainty is anticipated to persist into 2024.
In an interview with Reuters, Pekka Lundmark, President and CEO of Nokia, acknowledged the company’s continued belief in the mid-to-long-term market prospects. However, he expressed uncertainty regarding the timeline for market recovery. The news agency also noted that despite expectations of 5G revolutionizing automation and connectivity, the adoption of this cutting-edge technology in areas such as driverless cars, remote medical procedures, and engineering applications has been slower than anticipated.