In a striking shift within the telecommunications industry, Ericsson and Nokia have collectively cut around 20,000 jobs over the past two years, a staggering reduction that reflects their struggles against the rising dominance of Huawei in the 5G market. This trend has not only impacted these Nordic giants but has also reverberated through the entire sector, showcasing the challenges faced by Western telecom suppliers amid fierce competition and geopolitical tensions.
According to a report by Light Reading, Ericsson and Nokia have trimmed nearly 10% of their workforce, with Ericsson alone slashing about 12% of its positions since 2023, leaving it with fewer than 93,000 employees as of March 2025. Meanwhile, Nokia's workforce dwindled from an average of 84,795 in 2023 to 75,600 at the end of 2024. This drastic reduction in headcount comes as both companies grapple with declining revenues and the pressures of a rapidly evolving market.
As these traditional players struggle, Huawei has taken a different path. The Chinese tech giant has added an impressive 33,000 roles in research and development (R&D) since coming under U.S. sanctions, increasing its total employee count to 208,000. This growth marks a significant rebound for Huawei, which now employs 11,000 more people than it did in 2020, a year when its annual sales peaked.
The contrast between Huawei's expansion and the layoffs at Ericsson and Nokia highlights a broader trend in the telecommunications industry. While Western companies are cutting jobs and facing stagnant sales, Huawei has managed to thrive, bolstered by a supportive domestic market and significant investments in R&D. Huawei's R&D workforce has grown to 113,000, compared to just 80,000 in 2018, as the company seeks to innovate and maintain quality in its offerings despite external pressures.
At the recent Mobile World Congress (MWC) held in Barcelona, which saw attendance soar to 109,000—matching pre-pandemic levels—industry experts noted the stark differences in fortunes between companies. The event, which serves as a bellwether for the telecom sector, showcased the resilience of Huawei amid the turmoil faced by its Western counterparts.
Between 2015 and 2023, the combined headcount of 20 Tier 1 operators tracked by Light Reading fell by approximately 438,000, or 24% of the total workforce from 2015. This decline is indicative of broader trends in the industry, where automation, outsourcing, and a shift away from traditional roles have led to significant job losses.
Ericsson and Nokia's job cuts are compounded by the challenges faced by smaller players in the market. Companies like Parallel Wireless and Altiostar have struggled to gain traction, with Parallel Wireless reportedly cutting half of its workforce in mid-2022. Altiostar, acquired by Japan's Rakuten, has found it difficult to secure business outside of its domestic network, further underscoring the competitive pressures in the industry.
Samsung, another major player, has not been immune to these trends. In June 2024, the company transferred 700 of its 4,000 employees from its Samsung Networks division to other parts of the organization, reflecting a broader realignment of resources. Samsung's network revenues fell by 25% in 2024, although recent reports indicate a slight recovery with an 8% year-over-year increase for the quarter ending in March 2025.
In response to these challenges, Ericsson has ramped up its investment in R&D, increasing its annual expenditure by 13% since 2022, reaching 53.5 billion Swedish kronor (approximately $5.5 billion). This strategy appears to be a bid to safeguard its competitive edge in a market where it generated 45% of its revenues from the U.S. last year, up from 37% in 2023.
Nokia, on the other hand, has focused its cost-saving efforts on its mobile division, aiming to cut around €1 billion (approximately $1.1 billion) from annual costs by the end of 2026. Despite these efforts, Nokia's R&D spending has not seen significant increases, with only a modest rise of €300 million (about $341 million) since 2017. This lack of investment in R&D may hinder Nokia's ability to innovate and compete effectively against Huawei.
The implications of these job cuts and shifts in workforce dynamics extend beyond individual companies. As Western telecom suppliers continue to downsize, there are concerns about the diminishing pool of technical expertise available to support networks across various countries. This trend raises questions about the future of the industry, particularly as artificial intelligence and automation become more prevalent.
Moreover, Huawei's resilience in the face of U.S. sanctions has led to speculation about its long-term viability. Analysts have noted that Huawei has not experienced a decline in product quality since the sanctions were imposed, suggesting that the company has adapted effectively to the challenges it faces. With a captive domestic market and substantial government backing, Huawei's position in the global telecom landscape appears increasingly secure.
As the telecom industry continues to navigate these tumultuous waters, stakeholders in Europe and the U.S. may find themselves grappling with the implications of a more vibrant and robust Chinese ecosystem. The ongoing attrition of skilled labor at Ericsson and Nokia could ultimately leave these companies vulnerable, as the demand for expertise in a rapidly evolving technological landscape grows.
In conclusion, the contrasting trajectories of Huawei and its Western competitors serve as a stark reminder of the shifting dynamics within the global telecommunications market. As Ericsson and Nokia face significant challenges, Huawei's growth highlights the importance of innovation and adaptability in an increasingly competitive environment.
