The Finnish telecoms equipment maker Nokia will cut 14,000 jobs, or 16 per cent of its global workforce, following a 20 per cent slump in third-quarter sales.
The company announced on Thursday it needed to cut costs in the face of slowing demand for next-generation 5G equipment in countries such as the United States, which was no longer being offset by fast-growing markets like India.
Nokia is aiming to make savings of between €800 million ($842 million) and €1.2 billion by 2026 to achieve operating margins of at least 14 per cent.
Nokia, which currently has about 86,000 employees, posted third-quarter sales of €4.98 billion, a 20 per cent drop on the same period last year. That produced a third-quarter profit of €133 million, a 69 per cent fall compared to the third quarter of 2022.
"The earnings were much weaker than expected and the outlook is more uncertain. So it's not looking that good in the short term for Nokia," Atte Riikola, an analyst at Inderes.
Nokia's president and chief executive Pekka Lundmark said even though the sales figures had been "impacted by the ongoing uncertainty", the company expected "a more normal seasonal improvement in our network businesses in the fourth quarter".
"Resetting the cost base is a necessary step to adjust to market uncertainty and to secure our long-term profitability and competitiveness," he added.
Nokia is not alone in experiencing a reduction in demand for advanced telecoms equipment, as tougher trading conditions have forced mobile operators to scale back their 5G plans in several markets.
Swedish rival Ericsson has also laid off thousands of workers this year and this week said the uncertainty affecting its business would persist into next year.