Finnish telecom giant Nokia is planning to lay off 20% of its workforce, or the equivalent of over 14,000 employees, according to a report by the Times of India. The drastic move is part of a phased restructuring to reduce operating costs and boost profits by 2026.
The main factor is not the use of artificial intelligence (AI), which is often cited as a reason for layoffs. Rather, weak 5G demand, slow network rollouts, and fierce competition in the telecom sector are the main reasons.
Last year, CEO Justin Hotard announced that Nokia would be separated into a network infrastructure business that offers AI services and data centers while the telecom network operations business would become a mobile infrastructure unit. Nokia Defense was also launched, offering Nokia's network and mobile technologies for military-grade services. Non-core businesses are being reviewed for potential divestments to streamline the company's focus.
Unlike more than two decades ago, Nokia is no longer a big name in the smartphone arena. No Nokia smartphones have been released since last year, with the brand looking for new licensing partners. At the same time, their communications equipment market has begun to be taken over by Huawei and Ericsson.
