Drastic times can sometimes call for drastic measures.
Nokia
(ticker: NOK) announced plans to cut up to 14,000 jobs as part of a cost-saving initiative after profit tumbled 69% in the third quarter.
The Finnish telecom equipment maker said its plan will address the “challenging market environment.” It’s still early in the day but the cost-cutting measures may spare the stock from a similar fate to its rival
Ericsson
(ERIC). The Swedish telecom giant’s shares tumbled 6% Tuesday after it said tough market conditions would persist into 2024.
Nokia
stock was around 2% lower in early European trading, while its American depositary receipts fell 0.8%.
North America remains a problem area for both
Nokia
and
Ericsson.
The companies warned that U.S. customers are cutting back on spending, which helped put pressure on
AT&T
(T),
T-Mobile
(TMUS) and
Verizon
(VZ) stocks.
AT&T
‘s earnings later Thursday will provide further insight into the issues facing the sector.
Nokia’s
North America sales fell 45% year over year in the quarter, the worst decline of all its regions. “The strong decline in North America reflected weakness in both Mobile Networks and Network Infrastructure as customers continued to evaluate their spending and digest inventories,” the company said in a statement.
The layoffs, of between 9,000 and 14,000 employees, represent 10.5% to 16% of the company’s global workforce.
“While the timing of the market recovery is uncertain, we are not standing still but taking decisive action on three levels: strategic, operational and cost,” CEO Pekka Lundmark said Thursday.
Write to Callum Keown at [email protected]
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