Nokia Siemens Networks to slash workforce

NETWORKING OUTFIT Nokia Siemens Networks is set to shed as many as 5,700 jobs as part of a massive restructuring.

The move is part of a plan to help the ailing firm cut annual expenses and production overheads by €500m by the end 2011 compared to the end of this year.

As well as shedding between seven and nine per cent of its 64,000 strong workforce, the company will be reorganising its business units from five down to three to "better align with customer needs" as well as tightening its spending, expanding partnering and looking at potential acquisitions where "assets would add scale to existing product areas or customer relationships."

"Business models, innovation, growth and transformation are now very much front and centre when it comes to the selection of a technology partner - and our planned new structure will position us well in this changing market," said Rajeev Suri, chief executive officer of Nokia Siemens Networks.

From the start of next year the company will be divided into a 'Business Solutions' unit, which will focus on applications such as billing, process management and customer interaction, while the 'Network Systems' division will concentrate on the hardware side of things and the 'Global Services' will look after helping customers manage and support their networks.

Further savings will come from operating expense and production overhead cuts in things such as real estate, IT, site optimisation and overall general and administrative expenses.

Nokia Siemens reckons that these reductions will cost it in the range of €550m over the course of 2010-2011.

Despite the belt tightening across the business, the company is still on the look out to snap up other businesses if it can get a bargain that will work well with the rest of its portfolio.

"We recognise that we are operating in a market where customer needs are evolving fast," said Mika Vehvilainen, chief operating officer of Nokia Siemens Networks.

"We see acquisitions and expanded partnering as important tools to help meet these needs in the fastest, most efficient way possible."

It hasn't given details about which parts of the business will be targeted by these redundancies, but did say that certain geographies may be harder hit than others. µ