With falling US demand Nokia plans to sever up to 14,000 jobs

After weaker demand for next-generation 5G equipment reduced third-quarter sales by a fifth, Finnish telecom gear group Nokia announced on Thursday that it will reduce costs by up to 14,000 jobs.

During early trading, the company's shares had lost 5%.

Nokia and competitor Ericsson have attempted to partially offset the weakness with increased sales to India, a low-margin market, as demand has slowed in nations like the United States.

In a Q&A with reporters, Chief Executive Pekka Lundmark expressed that the market conditions are extremely difficult, as evidenced by the 40% decline in net sales in their most significant market—North America.

Nokia aims to achieve savings of 842 million euros (about 1.2 billion euros) or more by 2026, when it must present a comparable operating margin plan with a minimum of 14%.

At its highest, the company anticipates cutting jobs by 16%, or from 86,000 to between 72,000 and 77,000 workers.

Lundmark refused to provide further information, stating that staff representatives must be consulted first. He did, however, state that he wished to safeguard research and development.

In 2024, Nokia anticipates savings of at least 400 million euros, and in 2025, additional savings of 300 million euros.

This year, Ericsson has also let go of thousands of workers. On Tuesday, the company announced that the uncertainty it faces will last until 2024.

While echoing Ericsson's remarks regarding uncertainty, Nokia stated that its network businesses will see a more typical seasonal improvement in the fourth quarter.

The company kept its outlook for the entire year intact.