Nokia Massive Layoffs 2023: The Finnish telecommunications giant, Nokia, on Thursday cut down up to 14,000 jobs after the declining demand of 5G equipment caused the third-quarter sales by 20%. In order to achieve its operating margin forecast of at least 14% by 2026, Nokia is aiming for cost savings of between 800 million euros and 1.2 billion euros, according to a report by Reuters.
Chief Executive Pekka Lundmark said in an interview about the declining sales in North America by saying, “The market situation is really challenging and it is witnessed by the fact that in our most important market, which is the North American market, our net sales are down 40% in Q3.”
Nokia didn’t make as much money as they hoped in the last few months. Their profit was $467 million, which is less than what experts thought they would earn. The company expected to sell products worth 23.2 billion euros, but they had to lower that number to 24.6 billion euros. They also thought they would make 7 cents for every share, but they only made 5 cents.
The problem is that not many companies want to buy 5G equipment right now. This technology makes phones work faster, but phone companies in the US and Europe are spending less money. This means companies like Nokia are struggling because they can’t sell their products.
To cope, Nokia is going to change how it works. They will have fewer employees, around 72,000 to 77,000 compared to the 86,000 they have now. They also plan to spend less on research and development and let different parts of the company make their own decisions.
Meanwhile, Nokia showed off its new logo at an event before the Mobile World Congress in Barcelona. But they are not the only ones facing these problems. A company from Sweden, Ericsson AB, is also struggling because not many people are investing in new mobile technology. This is a tough time for companies in this business.