Nokia, the Finnish company that makes equipment for telecom networks, reported a 20% dip in sales QoQ. And to offset the impact it will let go of 14,000 employees, which is over 15% of the entire workforce.
According to the CEO, sales of 5G equipment fell 40% in North America, and other major markets are also past their peak growth. The layoffs will allow Nokia to save 400 million euros by the end of 2024, and a further 300 million in 2025, the company estimates.
The United States is one of the biggest markets for Nokia and fellow equipment provider Ericsson. The companies expect a seasonal improvement in the next quarter, but overall uncertainty would persist in 2024.
In an interview with Reuters, Pekka Lundmark, President and CEO of Nokia, said the company still believes in the mid-to-long-term market but he “simply does not know” when it will recover. The news agency pointed out 5G was supposed to be a revolution in automation and connectivity, but business is slow to adopt the new technology for driverless cars and long-distance jobs in the medical field and engineering.