Finnish telecoms giant Nokia is looking to cut between 9,000 and 14,000 jobs globally by the end of 2026 as it strives to reduce costs.
The company reported a 20% fall in net sales to €4.98bn (£4.34bn) in its third quarter ending in September and pinned the job cuts against slowing demand for 5G equipment. Profit over the period plunged by 69% year-on-year to €133m.
Nokia wants to cut costs by between €800m and €1.2bn by 2026, it said. Chief executive Pekka Lundmark said the firm wanted to act quickly by cutting costs by €400m in 2024, and €300m in 2025.
Advances in cloud computing and AI will need “significant investments in networks that have vastly improved capabilities”, said Lundmark. He added that Nokia expected “an improvement in our network businesses” in the current quarter.
Nokia job losses
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“I remain confident in the fundamental drivers of our business,” Lundmark said.
“Data traffic growth continues, the 5G rollout is still only around 25% complete, excluding China, and networks will [need] continued investment. Cloud computing and AI revolutions will not happen without significant investment in networks that have vastly improved capabilities.”
Before touchscreen smartphones were introduced by Apple and Samsung, Nokia was the largest handset manufacturer in the world but now concentrates on telecoms equipment after selling off its handset business.
It has about 86,000 employees around the world, but has been axing thousands of jobs since 2015.
In 2020, Nokia reached a deal with BT to become its largest 5G equipment provider, after Huawei was blocked from the UK’s 5G networks.
However, 5G equipment makers have seen operators in the US, India and the EU cut spending.
Nokia’s Swedish competitor Ericsson has also reported a fall in sales and laid off thousands of workers this year. In February, Ericsson announced it was cutting 8,500 jobs globally, and its people operations team stated that from 1 October “all Ericsson US field services will be performed by its external providers”.
Kate Palka, employment lawyer and client legal director at The Legal Director, noted that it was as yet unknown how many Nokia jobs would be affected in the UK, “but if that’s the case, in order to ensure that the redundancies are legally ‘fair’ Nokia must both justify the rationale for making the redundancies and also carry out a prescribed process that involves the election of workplace representatives and carrying out a full consultation with those representatives and a fair selection process.”
Lorna Hughes, associate in the employment team at Ashfords LLP, reminded that, in the UK, “Where proposing to make 20 or more redundancies within a 90-day period, there would be a requirement to notify the government’s redundancy payments service of the redundancies, as well as following a consultation process with employees and their representatives. As part of a fair dismissal process, Nokia would have to listen to any suggestions made by employees or representatives and consider whether there are any alternatives to dismissal.”
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