Nokia Siemens Networks, a leading maker of mobile devices, will cut 5700 jobs globally as part of a company restructuring plan
By Gabe Perna
Despite being one of the most recognizable forces in the mobile telecommunications industry, Nokia Siemens Networks is facing hard times.
In a move to cut annual costs by $740 million (€500 million), Nokia Siemens Networks announced it will lay off 5700 workers globally. In addition, the world’s leading maker of mobile devices says the firm’s five business units will be realigned into three, each targeting a specific customer focus area. Those three areas will be: Business Solutions, Network Solutions and Global Services.
Nokia Siemens Networks says the layoffs may represent up to 7-9 percent of its current approximately 64,000 employees. The company, which is a merger of Finnish based Nokia Corp. and Siemens AG out of Germany back in 2006, faced a year of operating losses, lowered sales and share.
(Read our article on the Nokia N900 – the company’s Smartphone attempt to battle the iPhone and blackberry.)
"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, in a statement. "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."
Rajeev Suri, CEO Nokia Systems Networks
In addition to operating expense and production overhead savings, Nokia Siemens Networks will target an annual reduction in product and service procurement costs. According to Nokia Siemens, this will be related to the cost goods sold, substantially larger than the targeted $740 million (€500 million) in operating expenses and production overhead reductions.
The company said its looking to make acquisitions which will strengthen its product line. "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, in a statement. "We see acquisitions and expanded partnering as important tools to help meet these needs in the fastest, most efficient way possible."
For more: Nokia Siemens Networks announces restructuring plans
Edited by: Kevin Doyle