After seeing its mobile networks business decline by 19 percent, Nokia announced that it will cut 14,000 jobs during its third quarter earnings report yesterday. Nokia said it will act “quickly” to reduce personnel expenses up to 15 percent, which will save at least $423 million in 2024 and a further $317 million in 2025.
The decline was led by the North American market, where carriers “continue to digest inventories and prioritize cash over capex spend,” according to Pekka Lundmark, President and CEO. On the positive side, India’s year-over-year growth continued in the third quarter with the deployment of 5G.
Lundmark also blamed the impact of a weaker macro-economic environment and the impact of higher interest rates on operator spending, which led to a top-line decline of 15 percent in constant currency.
There was more positive news as Nokia continues to expand into the enterprise space, which grew five percent in the quarter and now represents around 10 percent of group sales. Nokia’s dedicated sales teams are looking to further growth opportunities into the enterprise, webscale and government sectors.
In September, Nokia launched a Network as Code platform to help mobile network operators monetize their 4G and 5G assets by using Network APIs. “We want to empower a new wave of enterprise and industrial applications that can utilize the network in a much more programmable way,” Lundmark said.
Additionally, Lundmark pointed to Nokia’s fixed networks business as a potential bright spot as broadband infrastructure subsidy programs kick in next year. Lundmark said he remains confident in the fundamental drivers of Nokia’s business as data traffic continues to grow. With the 5G rollout only around 25 percent complete, networks will need continued investment, he said.
By J. Sharpe Smith, Inside Towers Technology Editor
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