Trump Tariffs may Exacerbate Risk of Layoffs for Nordic RAN Manufacturers

The Trump administration’s tariff policies are becoming a potential threat to Nordic RAN suppliers Ericsson and Nokia. Although the two companies remained cautious about the impact of tariffs during their earnings conference calls, analysts pointed out that tariffs could lead to a setback in their second quarter profits due to rising costs of components from China and other countries used in their manufacturing processes.

Recon Analytics analyst Daryl Schoolar stated in an email, “It is currently uncertain whether Trump’s tariffs will directly or indirectly affect Ericsson and Nokia.” He emphasized that the Trump administration’s continuous adjustment of tariff scope has increased industry uncertainty. However, both companies have transferred some of their manufacturing operations to the United States to alleviate the impact of tariffs. This strategy will help reduce the impact of tariffs, “Schoolar added.

The risk of layoffs persists

Regardless of whether tariffs are implemented or not, industry observers expect Ericsson and Nokia to face more layoffs, especially Nokia. Unfortunately, layoffs seem to have become the annual norm for these two companies, “Schoolar wrote.

Nokia announced plans as early as October 2023 to cut 14000 jobs by 2026, with an estimated cost savings of $850 million to $1.2 billion from the restructuring. Ericsson proposed in February 2023 to lay off 8500 employees by 2024.

As of 2024, Nokia has cut 2000 positions in China, 350 in Europe, and approximately 250 in India. But the company has not yet announced the specific time and location of the next round of layoffs. According to its restructuring schedule for 2026, the next round of layoffs is expected to commence soon.

“Schoolar pointed out that the factors behind the layoffs include changes in customer demand and adjustments to the solution mix of the two companies. The impact of tariffs on future layoffs is still difficult to predict, “he concluded,” but I believe that currently the two companies have not specifically reduced their employees due to tariffs, but tariffs may prompt them to accelerate their planned layoffs.”

Industry Challenges and Responses

The earnings conference call between Ericsson and Nokia shows that both companies are cautious about the actual impact of tariff policies. Although the transfer of American manufacturing may alleviate some cost pressures, the complexity of global supply chains still makes it difficult for them to completely avoid risks.

With the ongoing uncertainty of the Trump administration’s tariff policies, financial pressure and structural adjustments for Nordic RAN manufacturers are expected to continue. Industry observers believe that this chain reaction triggered by tariffs may reshape the competitive landscape of the global telecommunications equipment market.