Nokia will slash up to 14,000 jobs after waning demand for 5G mobile networks sparked a drop-off in sales.
The Finnish telecoms giant announced the cuts, which amount to as much as one in six staff, as part of a plan to drastically reduce costs.
Pekka Lundmark, the company’s chief executive, said mobile networks had been “disappointed” with 5G.
However, the take-up of the technology, which promised higher speeds, had been slower than expected.
Nokia revealed a 20pc drop in quarterly revenues to €4.98bn (£4.3bn) and a 69pc in profits to €133m.
It said staff numbers would fall from 86,000 to between 72,000 and 76,000 by 2026.
It comes days after Swedish rival Ericsson unveiled a profit warning that sent its shares tumbling.
Nokia, best known for dominating mobile phone sales at the turn of the century, is now focused on selling equipment used by mobile operators to build their networks.
New generations of mobile technology are crucial to the company as they drive spending on network upgrades.
Mr Lundmark said rising interest rates had hit investment, but added that the development of 5G networks had been disappointing.
He said: “A key reason why operators have been hesitant with their investments has been that their 5G monetisation has been slower than expected.
“And the reason for that has been that it has been difficult for them to introduce new applications that would take advantage of the capabilities of 5G.
“They have been disappointed in their own ability to monetise 5G.”
The company highlighted slower sales in the US and declining growth in India.
Mr Lundmark predicted that the arrival of new devices, such as augmented reality (AR) and virtual reality (VR) headsets, would boost demand.
He said: “We need to make it easier for them to build new use cases. I do believe that once we start seeing these new devices on the market, AR/VR immersive experiences, we will start to see a completely new range of applications emerging that will be driving capacity needs.”
Nokia has substantial operations in the UK, although it does not say how many staff it employs in Britain out of 37,700 across Europe.
Nokia and Ericsson had been boosted by government requirements that telecom operators rip Huawei equipment out of their networks, although the Government has pushed back deadlines.
The Finnish company sold its mobile phone business to Microsoft in a deal worth €5.4bn in 2013, although the division failed to compete with Apple and Samsung.