Finnish telecom giant Nokia Oyj yesterday said that it would cut up to 14,000 jobs as profits fell on weakening demand for its 5G equipment in North America.
“In the third quarter, we saw an increased impact on our business from the macroeconomic challenges,” Nokia chief executive officer Pekka Lundmark said in a statement.
Nokia’s savings program is expected to reduce staffing to as low as 72,000, cutting costs by up to 1.2 billion euros (US$1.27 billion) by 2026, the company said.
Photo: Reuters
The program targets business areas Mobile Networks, Cloud and Network Services and corporate functions.
“The most difficult business decisions to make are the ones that impact our people,” Lundmark said.
Nokia reported that its profits reached 133 million euros in the third quarter, a 69 percent drop from the same period a year earlier.
Despite the uncertainty in the third quarter, Nokia said it expects an “improvement in our network businesses in the fourth quarter.”
Locked in a competition for 5G networks with Swedish rival Ericsson AB and China’s Huawei Technologies Co (華為), Nokia’s sales dropped by 20 percent to 4.98 billion euros in the third quarter.
The company had hoped that its 5G rollout in India would compensate for a slowdown in spending by North American telecom operators this year, but was faced with a disappointment.
“We saw some moderation in the pace of 5G deployment in India, which meant the growth there was no longer enough to offset the slowdown in North America,” Lundmark said.
The latest 5G technology holds the potential to enable fast video downloads and innovations such as high-speed autonomous vehicles.
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