- Ericsson and Nokia are being cautious about the impact of President Trump's tariffs
- Industry watchers should expect to see more layoffs - particularly from Nokia - whether or not the tariffs happen
- Recon's Daryl Schoolar doesn't expect that the Trump tariffs will impact layoff plans — at least as of now
As their earnings calls showed, Nokia and Ericsson are being cautious on what they say about the Trump tariffs as the import taxes actually come into effect. Both Nordic telco vendors intimated on the calls that their second quarter earnings will likely be hit by the additional cost of Chinese — and other — components they use in manufacturing.
“There is little certainty in what if any tariffs might directly or indirectly impact Ericsson and Nokia,” noted Recon Analytics analyst Daryl Schoolar in an email to Fierce. “The Trump administration is constantly changing the scope of its tariffs.”
“Both companies have moved some manufacturing to the US, which will help mitigate the impact of tariffs,” Schoolar said.
The layoffs question
Industry watchers should expect to see more layoffs — particularly from Nokia — whether or not the tariffs happen. “Unfortunately, layoffs appear to be a nearly annual occurrence at Ericson and Nokia,” Schoolar wrote.
Nokia revealed plans to slash up to 14,000 jobs by 2026 in October 2023. The company expects the restructuring to save between $850 million and $1.2 billion by 2026. Similarly, Ericsson said in February 2023, it would cut 8,500 jobs through 2024.
Nokia hasn’t said yet when it will take its next big swing at its 14,000 job restructuring target. In 2024, it eliminated 2,000 positions in China, 350 jobs in Europe, and around 250 in India. It hasn’t yet said when the next cuts will be, or where they will come from, they should happen reasonably soon, however, given Nokia’s 2026 restructuring timescale.
“Multiple factors drive those layoffs including changes in customer demand and shifts in both companies’ solution portfolios,” Scholar noted.
“The impact of tariffs will have on future layoffs is difficult to say,” the analyst concluded. “I don’t think either company is at the position yet that they would reduce headcount specifically due to tariffs, but tariffs could encourage them to accelerate already planned layoffs.”