Nokia Corporation revealed its plans to layoff a substantial portion of its workforce. The decision follows a disheartening 20 percent drop in third-quarter sales due to sluggish demand for 5G equipment in crucial markets, particularly North America. In an official statement released on Thursday, Nokia declared its intention to eliminate as many as 14,000 jobs in an effort to streamline operations and reduce costs. The company’s biggest unit by revenue — the mobile networks business — declined 24% to 2.16 billion euros, driven mainly by weakness in the North American market. Operating profit for the division fell 64%.
“Cloud computing and AI revolutions will not materialize without significant investments in networks that have vastly improved capabilities.” While it’s unclear when the market will improve, Nokia isn’t “standing still but taking decisive action on three levels: strategic, operational and cost,” Lundmark said. “I believe these actions will make us stronger and deliver significant value for our shareholders.” Nokia is one of the world’s main suppliers of 5G, the latest generation of broadband technology, along with Sweden’s Ericsson, China’s Huawei and South Korea’s Samsung. Earlier this year, Ericsson said it was cutting 8% of its global workforce as it looked to reduce costs. While acknowledging the challenges faced during the third quarter, Chief Executive Pekka Lundmark expressed optimism about a more typical seasonal improvement in the network businesses during the fourth quarter. Nokia plans to restructure its corporate center to provide strategic oversight and guidance, safeguard research and development spending, and grant more autonomy to its business units.