Jakarta, CNBC Indonesia – Nokia carried out massive layoffs which affected 14,000 employees. This was announced today, Thursday (19/10/2023).
In its official statement, Nokia is pessimistic that market performance will recover after reporting business growth fell 20% in Q3-2023, following weak demand for 5G network equipment.
Nokia shares fell 2% after the business report was announced.
The weakening of the telecommunications industry in the United States (US) has made network providers such as Nokia and Ericsson look for new, more bona fide markets such as India. Unfortunately, the Indian market has now returned to normal after reaching peak growth in 2022.
“The current market situation is very challenging. This can be seen from our most strategic market, North America, which also experienced a sales decline of up to 40%,” said Nokia CEO Pekka Lundmark, quoted by Reuters.
For this reason, Nokia was forced to take efficiency steps. Employees were cut to 72,000 to 77,000 from a total of 86,000. This means that Nokia is cutting 16% of its number of employees.
Lundmark did not provide further details about which divisions were affected by company policy. However, he said he would continue to maintain the research and development team.
Ericsson has already cut thousands of employees this year. The giant admits that the current economic uncertainty will affect its business in 2024.
Nokia also indicated a similar sentiment.
“We continue to believe in the market’s medium to long-term resilience. However, we will not sit and pray that the market recovers in the near future,” he said.
“We don’t know when the market will recover,” he added.
The 5G network is predicted to revolutionize the technology industry, by bringing about an era of automation such as self-driving cars. However, the economic slowdown that affected the business climate made this network slow to be adopted.
With this slowdown, telecommunications providers are struggling with investment spending, while having to reduce expenses.
At the beginning of this year, telecommunications companies such as BT Group announced plans to cut 55,000 jobs. Meanwhile, US telecommunications giant Vodafone is also planning to lay off 11,000 jobs.
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