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# Finnish Telecom Giant Nokia to Cut Jobs to Cut Costs

By Mariko Oi & Tom Espiner, BBC News

**19 October 2023, 07:02 BST** | *Updated 10 minutes ago*

_Image source: Getty Images_

Finnish telecoms giant Nokia has announced plans to cut between 9,000 and 14,000 jobs by the end of 2026 in an effort to reduce costs. This decision comes as the company reports a 20% drop in sales between July and September, attributing the slump to slowing demand for 5G equipment, particularly in North America.

With a global staff of 86,000 employees, Nokia aims to achieve cost savings of Ôé¼800m to Ôé¼1.2bn (┬ú695m-┬ú1bn) by 2026. The company’s customers have been scaling back spending due to high inflation and interest rates. Meanwhile, advancements in cloud computing and AI require substantial investments in networks with enhanced capabilities, according to CEO Pekka Lundmark.

To respond decisively to the uncertain market recovery, Nokia plans to reduce costs by Ôé¼400m in 2024 and Ôé¼300m in 2025. Despite the ongoing uncertainty, Mr. Lundmark remains optimistic about the current quarter, expecting an improvement in their network businesses.

The specifics of the job cuts, including the potential impact on UK employees, have not been disclosed. However, Nokia emphasizes that the decision was necessary to address market uncertainty and safeguard long-term profitability and competitiveness. The company pledges to support affected individuals and has initiated the consultation process.

While Nokia was once the world’s largest handset manufacturer, it failed to anticipate the growing popularity of internet-enabled touchscreen phones, eventually losing its leadership position to competitors like Apple and Samsung. Following the sale of its handset business to Microsoft, Nokia redirected its focus to telecoms equipment. However, amid spending cuts by US and EU operators, 5G equipment manufacturers like Nokia and its Swedish rival Ericsson have faced challenges. Despite higher sales efforts in India, even the 5G rollout there has slowed down.

The prevailing uncertainty continues to impact technology companies, including telecom firms, as businesses affected by inflation and rate hikes curtail spending and tech investments. Consequently, thousands of tech workers worldwide have lost their jobs over the past two years. Companies such as Meta (owner of Facebook), X (formerly known as Twitter), Amazon, and Snap have all made redundancies. Nonetheless, there is still demand for tech workers, with 80% of big tech employees who lost their jobs managing to secure new employment within three months, reports job posting firm Zip Recruiter.

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