Nokia is planning to reduce its workforce by up to 14,000 employees as part of a cost-saving initiative following a substantial decline which is approximately 69% in third-quarter earnings.
Nokia aims to trim its cost base by 800 million to 1.2 billion euros by the end of 2026. This reduction will result in a workforce decrease from 86,000 to a range of 72,000 to 77,000 employees.
Nokia’s decision comes in response to challenges from a slowing global economy and reduced infrastructure spending by mobile operators.
The mobile networks business saw a 24% decline in sales, primarily due to decreases in North America and moderated sales in India as 5G deployments normalized.
Nokia remains confident in its full-year net sales forecast, citing the growth in data traffic, ongoing 5G rollout, and the importance of continued network investment.
The company still expects full-year net sales in a range between 23.2 billion euros and 24.6 billion euros, sticking to its forecast.
“I remain confident in the fundamental drivers of our business,” Nokia CEO Lundmark said in a statement on Thursday.
Nokia’s numbers come after Sweden’s Ericsson released third-quarter results on Wednesday, which showed a decline in revenue and similar issues in North America.
Ericsson CEO Borje Ekholm warned in a Wednesday statement that the “underlying uncertainty impacting” its mobile networks business will persist into 2024, casting doubt over a recovery for telecommunications equipment makers.