Nokia Siemens Networks axes 6,000 jobs in cost cutting plan

Global telecommunications equipment supplier Nokia Siemens Networks yesterday announced plans to improve its financial performance and return to growth by resorting to a second round of job cuts and reduce annualised operating expenses and production overheads by €500 million by the end of 2011

The world's second-largest maker of telecommunications equipment announced plans to cut 7 to 9 per cent or nearly 6,000 jobs from a 64,000 strong workforce aimed at bringing in savings of €500 million ($732 million) in operating expenses annually by the end of 2011 compared to end 2009.

Nokia Siemens Networks, the 50:50 joint venture between Finland's Nokia and Germany-based Siemens, had proposed to cut around 10-15 per cent of its workforce or 1,820 jobs at the time of its merger, in June 2006. (See: Nokia Siemens to cut 1,820 jobs)

The Espoo, Finland-based company's plan includes reorganising the company's business units to better align with customer needs; extensive operating expense and production overhead reduction, including a global personnel review; ongoing purchasing savings; expanded partnering to ensure a full portfolio of world-class products and services; and potential acquisitions where assets would add scale to existing product areas or customer relationships.

The former head of Services business of Nokia Siemens Networks Rajeev Suri, appointed on 1 October 2009, to head the company will realign the company's five business units into three, each targeting a specific customer focus area from 1 January 2010.

''As our customers make purchasing decisions, they want a partner who engages in issues well beyond a traditional discussion of technology,'' said Suri.

''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,'' he added.