Nokia is to cut up to 14,000 jobs as part of a cost reduction strategy after reporting a drop in quarterly profit.
The Espoo, Finland-based telecommunications equipment company said it will lower its cost base on a gross basis by between €800 million and €1.2 billion over a three-year period in order to "address the market environment".
A combination of higher interest rates and slower global growth prompted its customers to retrench, Nokia said.
This represents a 10-15% reduction in personnel, which will see the company cut its workforce from 86,000 to between 72,000 and 77,000.
Chief Executive Officer Pekka Lundmark said: "Resetting the cost-base is a necessary step to adjust to market uncertainty and to secure our long-term profitability and competitiveness.”
Nokia had been a market leader in the handheld phone sector before the rapid rise of smartphones, which was prompted by the release of Apple’s first iPhone in 2007. As a result, Nokia faced a swift decline in smartphone market share from 49.4% in 2007 to around just 3% in 2013, according to consultancy Gartner.
Its handset business was then sold to Microsoft in 2014 in a bid to refocus the company on telecoms equipment.
Despite the multi-billion dollar deal to acquire the business from Nokia, Microsoft wrote off what was left of Nokia’s handheld phone wing in 2015, which led to thousands of job cuts at the time.
Nokia had its eyes fixed on the future with a 2020 deal to supply equipment to BT Group PLC (LSE:BT.A) marking its attempt to capitalise on Huawei’s boot from the UK’s growing 5G network.
However, declining spending by network operators now seems to be hitting the company hard, particularly in the US where sales declined 19% in the third quarter, as firms “prioritize cash flow and deplete their inventories,” in Nokia’s own words.
Nokia reported a 69% drop in third-quarter profit to €133 million as a result, prompting the firm's shares 3.5% lower on Thursday.