The Finnish multinational telecommunications company Nokia Corporation says that it is going to slash 14000 jobs as its demand in the US market declines. The fall in the demand for Nokia in the US, especially North America, one of the stronger markets of the company has caused a dip in the profits as well. The company introduced its 5G devices in the market but it did not get as many buyers as it had expected.
The decision to let go of thousands of their employees was made as the company is targeting to save big. Nokia plans to save a minimum of 400 million euros in 2024 and an additional 300 million euros in 2025. By the end of 2023, the company targets to save an amount between 800 million euros and 1.2 billion euros.
The current employee base of 86,000 will be reduced to somewhere between 72,000 and 77,000. Or about 16 percent of the total manpower of the company will be slashed down.
What Did Nokia Have To Say?
Pekka Lundmark, the Nokia Chief Executive said that the market situation was really changing and that it was witnessed by the fact that in their most important market, the one in North America, their total sales were down by 40% on Q3 alone. He was talking in an interview with Reuters.
He continued that the company continues to believe in the mid to longer-term market however they were not going to just sit and wait and pray that the market would recover anytime. He also said that they had no idea when the market would be recovering.
Lundmark said that before making any decision the company will first conduct a meeting with the representatives of the employees. Although, he views protecting the research and development sector of the company. He did not provide any further information.
What Happened After Nokia Introduced 5G?
The major reason that the company is now planning to slash the jobs is that it did not meet the expected sales that it was supposed to make following the launch of its 5G equipment.
With the introduction of the 5G devices, the revenue of the company was also supposed to go high.
Unfortunately, it did not happen and Nokia is not the only company that had to make a decision to axe up to thousands of jobs due to slow growth and the investment budget struggles.
Previously this year, BT Group, a telecommunications company in Britain, has also announced to let go of around 55,000 people and Vodafone plans to slash 11,000 positions.
Kester Mann, an analyst at CCS Insight said that the 5G industry should be one that’s actually flying high and buoyed by unrelenting demand for its various services, but rather what happened was the opposite. Still, there are countless questions that continue to be posed regarding the relevance of the operator that provides the services and also about whether the operator will have a long-term future.