Nokia, the Finnish company that makes telecommunications network equipment, reported a 20% decline in quarter-on-quarter sales. And to offset the impact it will lay off 14,000 employees, or more than 15% of its entire workforce.
According to the CEO, 5G equipment sales have fallen by 40% in North America, and other major markets have also passed their peak growth. The layoffs will save Nokia 400 million euros by the end of 2024 and another 300 million in 2025, the company estimates.
The United States is one of the largest markets for Nokia and equipment supplier Ericsson. Companies expect seasonal improvement in the next quarter, but overall uncertainty would persist into 2024.
In an interview with Reuters Pekka Lundmark, Nokia’s president and chief executive, said the company still believes in the medium- and long-term market but “simply doesn’t know” when it will recover. The news agency highlighted that 5G was supposed to be a revolution in automation and connectivity, but companies are slow to adopt the new technology for driverless cars and long-distance jobs in the medical and engineering fields .
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