Nokia’s business has been reduced by up to 20% in recent years, so the Finnish company has presented a layoff plan that will affect some 14,000 workers globally to reduce costs.
Now what Nokia now even dares to manufacture smartphones in Europeit seems that around you not everything is so good as we painted it, because according to what our colleagues tell us fandroidthat clear and determined commitment to 5G perhaps I have punctured the bubble and ended up now force a major restructuring to the Nordic manufacturer.
And we are not referring to the image change, the first in almost 60 yearsthat we live at the beginning of this 2023, but at something less anecdotal and more painful like the massive layoff of some 14,000 employees that they would already be negotiating and that they anticipated us from Reuters a few days ago.
The decision has already been made, and the CEO of Nokia himself, Pekka Lundmarkjustified the decision and explained the circumstances:
The market situation is really challenging now, and this is attested to by the fact that in our most important market, which is the United States, our net sales are down 40% in the third quarter [de 2023].
The main cause of this problem is the enormous bubble created by the jump to 5G connectivitywhich for the most part already occurred with massive sales in previous years, now reducing demand of devices in a very notable way.
Not only that, and it is that the escalation of geopolitical tensionsthe global crises that we have been chaining for several years and excessive inflation have obviously contributed to making the situation even worse.
It is worth remembering that Nokia not only sells smartphones and/or mobile devicesbut also makes profits based on patents related to 5G as well as selling Wi-Fi network solutions and 5G equipment of all kinds, with all its main market niches falling sharply by around 20%.
And speaking of figures, they tell us that Nokia will eliminate approximately 14,000 jobs in all its divisions and in all its locations globally to go from approximately 86,000 employees to approximately 72,000, in order to save costs estimated at around 800 million euros for the next financial year, and up to about 1.2 billion annually more or less by 2026.
It is not the first manufacturer technology nor will it be the lastunfortunately, in adjusting their businesses and production costs, since they have recently Even Qualcomm also announced the departure of about 1,200 employees by “continued uncertainty in the macroeconomic environment and the demand crisis”.