The encyclopedia · People & Management · People decision · 2023
Nokia cut up to 14,000 jobs after betting too hard on a 5G spending boom
A steep earnings drop in 2023 forced Nokia to slash headcount by up to 14,000, undoing years of hiring for 5G rollout.
Nokia · 2023-10-19
What happened
Nokia had hired heavily in anticipation of a sustained 5G equipment spending surge. When telecom operators slowed investment and margins compressed in 2023, the workforce became disproportionate to demand.
On 19 October 2023, Nokia announced plans to cut between 9,000 and 14,000 jobs by 2026 as part of a €1.2 billion cost-reduction programme. CEO Pekka Lundmark said the cuts were necessary to protect profitability and long-term competitiveness.
The layoffs reversed much of the headcount growth built around a 5G boom that had not materialised as expected. The case is a clear example of a workforce plan built on a demand forecast that looked permanent but was cyclical.
Why it happened
- Nokia hired for a 5G rollout speed that operators could not sustain.
- Workforce planning treated a capital-spending peak as a new baseline.
- The company did not build enough flexibility into its cost base to absorb a demand dip.
- The cuts were announced after a profit miss, making them look reactive rather than planned.
The lesson
When you hire to a technology cycle, size the workforce for the trough as well as the peak — capital spending booms are not permanent baselines.
Aftermath
Nokia continued restructuring into 2024 and 2025, with further regional cuts, while seeking growth in network equipment and enterprise services.
Sources
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