Following a decline in third-quarter profitability, Finnish telecom equipment company Nokia announced on Thursday that it would eliminate up to 14,000 positions as part of a cost cutting plan.
The Finnish telecom behemoth announced that it will lower its cost structure and boost operational effectiveness to “address the challenging market environment.”
It stated that by 2026, there will be 72,000 fewer workers working for the company, cutting costs by up to 1.2 billion euros ($1.14 billion).
The significant layoffs follow Nokia’s announcement that third-quarter net sales were down 20% year over year to 4.98 billion euros. Profit for the time period decreased by 69% on an annual basis to 133 million euros.
One of the biggest manufacturers of telecommunications equipment, Nokia, has been struggling due to the weakening of the world economy and the reduction of infrastructure spending by mobile operators.
The mobile networks business, Nokia’s largest revenue-generating segment, saw a 24% year-over-year fall in sales to 2.16 billion euros, and a 64% year-over-year decline in operating profit.
According to Nokia, North American declines were the main cause of this.
Additionally, the business said that as 5G deployments “normalize,” sales volumes in India are “moderated.”
Next-generation mobile internet, or 5G, promises quicker download and upload times.
