Nokia, the Finnish telecommunications network equipment manufacturer, disclosed a 20% decline in quarter-over-quarter sales. In response to this setback, the company is set to reduce its workforce by over 15%, which equates to approximately 14,000 employees.
The CEO cited a 40% drop in 5G equipment sales in North America, along with waning growth in other key markets. The layoffs are anticipated to yield savings of 400 million euros by the close of 2024 and an additional 300 million euros in 2025, according to the company’s projections.
The United States stands as one of the largest markets for both Nokia and its counterpart, Ericsson. These companies anticipate a seasonal uptick in the upcoming quarter, yet prevailing uncertainties are expected to persist throughout 2024.
In an interview with Reuters, Pekka Lundmark, Nokia’s President and CEO, conveyed the company’s enduring confidence in the mid-to-long-term market. However, he acknowledged that the precise timing of the recovery remains uncertain.
The news agency highlighted that while 5G was initially envisioned as a transformative force for automation and connectivity, its adoption has been relatively sluggish in fields like autonomous vehicles and specialized long-distance applications in the medical and engineering sectors.
That being said, it is unlikely that Nokia will slow down its smartphone production. The Finnish company has been endlessly releasing new phones in different regions, including both feature phones and smart devices. This shows that the company’s phone business remains unaffected by this setback and Nokia fans don’t have anything to worry about.
The Nokia C210 was released for sale last month. It is a budget device powered by the Snapdragon 662 chipset, a 3000 mAh battery, and a 13MP main camera accompanied by a 2MP depth sensor.