Nokia to cut 14,000 jobs or 15% of its workforce after a slump in the sale of 5G equipment

As the global telecom industry wrestles with high-stakes competition and unprecedented challenges, leading Finnish telecom and consumer electronics manufacturer Nokia has decided to retrench a sizeable portion of its workforce.

The move is aimed at streamlining operations and offsetting the recent downturn in the company's quarterly sales. Nokia (NOKIA.HE) has announced a massive cut in its workforce, affecting up to 14,000 jobs as it seeks to reduce costs.

Why Nokia cut its Workforce?

Nokia's decision comes in the wake of a 20% slump in the firm's Q3 sales owing to sluggish demand for their 5G equipment. Connection-industry heavyweights like Verizon and AT&T in the US, a crucial market for Nokia, have slowed their tempo, pushing the company to seek expansion in regions like India.

The market recovery seems far from sight, with Nokia's CEO, Pekka Lundmark, warning of a prolonged market downturn without specifying a timeline.

Further tightening its belt, Nokia aims to save between 800 million euros and 1.2 billion euros by 2026 wherein the company's workforce will shrink to a range of 72,000 to 77,000, a nearly 16% drop from the current 86,000 employees.

Failing 5G Expectations

Amid slow adoption of 5G, a technology initially hailed as the precursor to an era of automation and self-driving vehicles, telecom companies worldwide are feeling the pinch.

Earlier, BT Group of the UK and Vodafone had also announced significant job cuts as the once buzzing industry is faced with questions about its relevance and longer-term future.

According to Nokia, faster mid-band equipment could play a crucial part in helping the market recover. In a challenging business milieu marked by uncertain market recovery and slow technology adoption, Nokia's decision reflects the hardships the telecom sector is currently facing.

As industry navigates these tough times, companies are resorting to drastic measures to stay afloat. While layoffs are a clear indication of the crisis at hand, they also serve as a wake-up call for an industry in need of reinvention.

Source