Nokia Siemens To Axe Nearly Quarter of Workforce Worldwide

By: EW News Desk Team   Date: 24 November 2011

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EW News Desk Team

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24 November 2011

Network-equipment vendor Nokia Siemens Networks (NSN), announced on Wednesday that it would be cutting 17,000 of its jobs worldwide, or 22 percent of its workforce, as it tries to save up to $1.35 billion a year to compete with its strongest rival Ericsson and a new wave of Chinese entrants.

The company, which has struggled to make a profit since it was jointly set up in 2007 by Finland’s Nokia Corporation and Germany’s Siemens Ag, did not say where it would make the cuts, but analysts believe that the latest move could be geared towards preparing the company for an initial public offering soon.

"While we plan to reduce our work force significantly, we will not make simple across-the-board reductions. We will focus on doing what we do best," said NSN Chief Executive Rajeev Suri in a conference call with the Wall Street Journal on Wednesday.

NSN has also pledged to double down on its mobile broadband businesses, while divest other noncore businesses or managing them for value.

“We believe that the future of our industry is in mobile broadband and services – and we aim to be an undisputed leader in these areas," said Sur. "At the same time, we need to take the necessary steps to maintain long-term competitiveness and improve profitability in a challenging telecommunications market."

The job cuts will be completed by the end of 2013, by when NSN is expected to be running as a standalone company from its initial founders. Both Siemens and Nokia have stated that they wish to make the venture more independent and see a listing as one of the options within a few years.

Market watchers had speculated that Nokia would want to dispose of its ownership in the loss-making venture and focus on developing mobile phones in its new partnership with Microsoft. Siemens has also been looking for an exit since Peter Loescher took over as group chief executive shortly after operations between the two started.


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