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Nokia Siemens Networks Restructures - Looking at 5,000 Redundancies
Nokia Siemens Networks has outlined plans to restructure itself in an attempt to improve financial performance and return to growth. The core plan is to take the five divisions and merge them down to just three: Business Solutions, Network Systems and Global Services. There will also be job cuts and a move to lower unit costs to compete with Chinese vendors.
The changes will come into effect at the beginning of next year.
"As our customers make purchasing decisions, they want a partner who
engages in issues well beyond a traditional discussion of technology," said
Rajeev Suri, chief executive officer of Nokia Siemens Networks. "Business
models, innovation, growth and transformation are now very much front and center
when it comes to the selection of a technology partner - and our planned new
structure will position us well in this changing market."
The company also announced another round of cost-reductions. Nokia Siemens
Networks is targeting a reduction of annualized operating expenses and
production overheads of EUR 500 million by the end of 2011 compared to the end
of 2009. The company estimates that total charges associated with these
reductions will be in the range of EUR 550 million over the course of 2010-2011.
As part of this effort, the company will also conduct a global personnel review which may lead to headcount reductions in the range of about 7-9 percent of its current approximately 64,000 employees. That's around 5,000 redundancies.
The company also said that it will seek to cut its product and service procurement costs - largely to respond to increased competition from the likes of Huawei and ZTE.
"We recognize 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."
Posted to the site on 3rd November 2009