• Fri. May 24th, 2024

A myth in danger: Nokia lays off 14,000 workers

ByAlain Brodin

Oct 23, 2023
A myth in danger: Nokia lays off 14,000 workers

Nokia, once a titan in the mobile industry during the 90s, is facing challenges yet again. The company has announced the layoff of approximately 14,000 employees, a decision driven by a 20% drop in revenue. The slower-than-expected rollout of 5G technology is a significant factor behind this decline.

The Evolution of Nokia

The name Nokia often evokes nostalgia for many. Founded in Finland in 1865, the original Nokia began as a paper pulp manufacturing company. Over the decades, it ventured into various products, from rubber to raincoats, toys, and even toilet paper. However, it wasn’t until the 90s that Nokia became a global sensation for its mobile phones.

In the mobile industry’s golden era, Nokia’s phones were as sought-after as today’s Apple or Samsung devices. But the landscape shifted with the introduction of the iPhone, its touch screen, app store, and the rise of affordable Android devices. Unable to compete, Nokia sold its mobile division to Microsoft in 2013. This venture didn’t last long, and Microsoft eventually sold the Nokia brand to the Chinese company HMD Global. Today’s Nokia phones, under HMD Global, bear little resemblance to the original Finnish company, save for the logo.

A myth in danger: Nokia lays off 14,000 workers
The mythical and genuine Nokia was founded in Finland in 1865 as a pulp company. In its first decades it manufactured products as diverse as rubber, raincoats, balls, toys and even toilet paper:

Nokia’s Strength in Patents

Despite losing its mobile division, Nokia remained a powerhouse in another domain: patents. The company played a pivotal role in shaping mobile telephony in the 90s and boasts nine Nobel laureates among its former employees. As a result, Nokia holds thousands of essential mobile patents, earning billions from almost all manufacturers.
Over the years, Nokia has capitalized on this strength, owning over 5,500 patents related to 5G technology. Additionally, they manufacture communication network equipment, supplying to over 130 countries.

The Current Challenges

While Nokia reported revenues of 24.9 billion euros in 2022 and employed over 86,000 people, the company is currently facing hurdles. The anticipated boom in 5G technology hasn’t materialized as quickly as expected, affecting patent royalties and equipment sales. External factors like global conflicts and inflation further exacerbate the situation.

According to Reuters, Nokia’s revenues in the third quarter of 2023 stood at 4.8 billion euros, a decline from the 6.24 billion euros during the same period the previous year. This downturn, coupled with market uncertainties, has led Nokia to make the tough decision of laying off 14,000 employees, aiming to save up to 1.2 billion euros by 2026.

Looking Ahead

The future for Nokia remains uncertain. While the eventual widespread adoption of 5G seems inevitable, unforeseen events, such as geopolitical tensions, can significantly impact companies reliant on substantial investments.