Nokia's Layoffs Sweep Across Globe: Nearly 2,000 Jobs Lost in Greater China, 350 in Europe

Nokia's Layoffs Sweep Across Globe: Nearly 2,000 Jobs Lost in Greater China, 350 in EuropeFinnish telecommunications giant Nokia recently announced a massive layoff plan affecting multiple regions globally, including the loss of nearly 2,000 jobs in Greater China, representing one-fifth of its workforce in the region. Simultaneously, the company plans to cut 350 positions in the European market

Nokia's Layoffs Sweep Across Globe: Nearly 2,000 Jobs Lost in Greater China, 350 in Europe

Finnish telecommunications giant Nokia recently announced a massive layoff plan affecting multiple regions globally, including the loss of nearly 2,000 jobs in Greater China, representing one-fifth of its workforce in the region. Simultaneously, the company plans to cut 350 positions in the European market.

According to Bloomberg, citing sources familiar with the matter, these layoffs are part of a series of measures Nokia is taking to achieve its goal of saving 8 billion to 12 billion in costs by 2026. Despite reporting a 9% increase in operating profit in its latest earnings report, Nokia attributed this growth primarily to cost reductions.

Sources revealed that Nokia has confirmed its ongoing negotiations with European employees set for potential layoffs. However, the company has yet to issue an official statement regarding the layoffs in Greater China. As of December 2023, Nokia had 10,400 employees in Greater China and 37,400 in Europe.

Following the announcement of the layoffs, Nokia's stock price declined by 2% in after-hours trading. Market analysts generally believe that these layoffs are part of Nokia's strategy to address the global economic downturn and intensified competition within the telecommunications industry.

Nokia CEO Pekka Lundmark expressed optimism regarding improvements in several of the company's businesses during an earnings conference call, acknowledging, however, that some segments remain challenged by market weakness. Notably, Nokia "secured several key deals" in the mobile network sector during the third quarter, but this did not prevent an overall decline in company sales.

The earnings report revealed that Nokia's third-quarter net sales reached 4.326 billion, down 8% year-over-year, falling short of analysts' consensus estimate of 4.73 billion. Adjusted operating profit stood at 454 million, representing a year-on-year increase of 9%, while adjusted earnings per share reached 0.06, up from 0.05 in the same period last year.

To navigate competitive pressures, Nokia has been actively diversifying its customer base. The company recently acquired InfineraCorp., a specialist in data center networking products, and sold off its submarine cable division. Moreover, Nokia is reportedly considering the sale of its mobile device unit, although negotiations are still in the very early stages and a transaction may not materialize.

Looking ahead, Nokia still expects adjusted operating profit to fall within the range of 2.3 billion to 2.9 billion in 2024. However, this large-scale layoff plan could potentially impact its future development, particularly in the European market, where Nokia faces fierce competition from rivals such as Huawei and Ericsson.

Nokia's layoffs have sparked industry concern about the future trajectory of the telecommunications sector. With the global economy continuing to struggle, the telecommunications industry is facing significant pressure. To survive and thrive, telecommunications companies are compelled to implement various cost-cutting measures to enhance efficiency, and layoffs have become an unavoidable option for some.

This event serves as a reminder that in a globalized world, businesses face increased uncertainty in their survival and growth. Companies must continually adapt to navigate a rapidly evolving market environment. For Nokia, these layoffs may be just the beginning, and its future path remains challenging.

Here are some points for analysis and consideration regarding Nokia's layoffs:

• Layoffs sweep across the globe: Nokia's layoffs are not an isolated incident. In recent years, businesses across various industries worldwide have initiated layoffs to address economic headwinds and intensified competition.

• Telecommunications industry faces immense pressure: As a critical component of infrastructure, the telecommunications industry is inevitably affected by economic conditions. With the advent and development of 5G technology, competition within the industry has intensified, necessitating consistent technological innovation and cost control for companies to maintain their competitive edge.

• Nokia's future development presents challenges: While Nokia expressed optimism about its future prospects in its earnings report, these layoffs will undoubtedly have some impact on its future evolution. To thrive in a highly competitive landscape, the company must actively pursue business transformation and identify new growth avenues.

• Businesses need to adapt to the changing times: In an era of rapid change, companies must continually adapt and enhance their competitiveness to succeed in the marketplace. Nokia's layoffs serve as a reminder for companies to prioritize monitoring their development trends and proactively addressing transformations to achieve success in the future.

In conclusion:

Nokia's layoffs are part of its strategy to address the global economic downturn and intensified competition within the telecommunications industry. While this layoff plan might affect its future development, the company must proactively pursue business transformation and identify new growth avenues to remain competitive in the long run.