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Nokia Siemens Networks to slash almost 6,000 jobs

No omelette without strategic workforce rebalancing

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Nokia Siemens Networks is planning to shave €500m off annual running costs over the next 26 months, with cuts that could include six thousand jobs.

The plan is to cut €500m from annual expenses by the end of 2011, and includes a new company structure as well as greater emphasis on 'partnerships' and savings from purchasing. The plans also include laying off between seven and nine percent of the 64,000 staff, through a "global personnel review".

Cost cutting comes on the back of third-quarter figures which showed a drop in net sales of 21 per cent and an operating loss of €1.1bn. That loss is, in large part, due to a one-off write down of €908m.

So, the firm feels it can't avoid some "strategic workforce rebalancing" over the next 24 months. This could be more than the nine per cent suggested and is expected - when combined with the restructuring and other measures - to cost around €550m in total: a decent investment if the figures work out.

The new structure, which comes into effect in January 2010, sees the existing five divisions merged into three: Global Services, which takes care of existing customers, Network Systems, supplying the actual hardware for fixed and mobile networks, and Business Solutions, which will focus on pushing advanced billing platforms and "tapping into rich subscriber data to deliver a unique customer experience".

Purveyors of network infrastructure have all had a hard time of late, as the economic situation has slowed the expected rollout of advanced networks around the world. While the developing world is still putting up masts as fast as possible, the margins still aren't as good as the nice new LTE networks that are supposed to be springing up by now. ®

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