Nokia is laying off 14,000 employees from its workforce following a 20% drop in third-quarter sales, the company announced on Thursday.
From its 86,000 workers, the Finnish smartphone maker aims to have a total employee base between 72,000 and 76,000 employees, marking a reduction of 16% of its workforce.
Through these cost-cutting measures, Nokia is looking to save at least €400 million in 2024, €300 million in 2025, and between €800 million and €1.2 billion in 2026.
"The market situation is really challenging and it is witnessed by the fact that in our most important market, which is the North American market, our net sales are down 40% in Q3," Nokia CEO Pekka Lundmark told Reuters.
Despite this, Lundmark expressed optimism about the company's fourth-quarter performance.
"We continue to believe in the mid-to-long-term market, but we are not going to sit and wait and pray that the market will recover anytime soon... We simply don't know when it will recover," he concluded.
The decision comes after Swedish telecoms giant Ericcson also confirmed cutting thousands of jobs from its workforce earlier this year due to an uncertain growth trajectory.
Global Smartphone Market Is Down 8% YoY
The recent layoffs come in light of a global drop in the overall demand decline for smartphones worldwide.
According to research from Counterpoint, global smartphone sales declined 8% year-over-year in 2023.
Explaining the trend, the institute attributed the decline to the slow recovery of the market demand. The market experienced the lowest level of sales in the last decade in 2023, mostly due to a change in consumer patterns about device replacement.
However, positive sentiment has emerged in the second part of 2023.
The smartphone market achieved a 2% growth between the second and third quarters of this year, indicating the possibility of an upward trend in the remainder of the year.
Edited by Nikola Djuric