Telecom gear maker Nokia said Thursday that it's planning to cut up to 14,000 jobs worldwide, or 16% of its workforce, as part of a push to reduce costs following a plunge in third-quarter sales and profit. The Finnish company, one of the world's main suppliers of high-speed 5G wireless networks, said it's trying "to navigate the current market uncertainty" as higher interest rates take a toll. The company said it's aiming to slash $848 million to $1.3 billion in costs by the end of 2026. That's expected to lead to a reduction from 86,000 employees to between 72,000 and 77,000 over that time period, the AP reports.
Nokia's third-quarter sales plummeted 20%, to $5.28 billion from $6.6 billion in the same three-month period last year. Comparable net profit plunged to $316 million in the July-to-September quarter, from $58 million a year earlier. The company's biggest unit by revenue—the mobile networks business—declined 24% to $2.28 billion, driven mainly by weakness in the North American market, where sales nosedived 45% year-on-year. Operating profit for the division fell 64%. "We continue to believe in the mid- to long-term attractiveness of our markets," Nokia CEO Pekka Lundmark said in a statement. "
"Cloud computing and AI revolutions will not materialize without significant investments in networks that have vastly improved capabilities," Lundmark said, stressing that the issue is marketwide and Nokia's competitors are facing similar problems. The market weakness comes as telecom operators, Nokia's main clients, put investments on hold because of higher interest rates and financial costs. The world's other main suppliers of 5G broadband technology are Sweden's Ericsson, China's Huawei, and South Korea's Samsung.
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