Finnish telecom gear group, Nokia, on Thursday announced that it will cut up to 14,000 jobs to reduce costs after weaker demand for next-generation 5G equipment lowered third-quarter sales by a fifth.
The company is targeting savings of between 800 million euros and 1.2 billion euros by 2026.
However, it expects to reduce its employee base to between 72,000 and 77,000, from 86,000, or about 16% job cuts at the high end.
“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,” Chief Executive Pekka Lundmark said in an interview with Reuters.
The company did not cut its full-year outlook but said it expects to see a more normal seasonal improvement in its network businesses in the fourth quarter.
“We continue to believe in the mid-to-long-term market, but we are not going to sit and wait and pray that the market will recover anytime soon,” Lundmark said. “We simply don’t know when it will recover.”
“Only 25% of 5G base stations in the world outside of China currently has mid-band,” Lundmark said.
Nokia is moving to a leaner corporate centre to boost strategic focus, while protecting spending on research and development and giving more operational autonomy to business units.
Nokia CEO Pekka Lundmark said the company does not expect a market recovery soon but is reducing costs and improving efficiency.
