Nokia Siemens Cutting 17,000 Jobs

By Features FOXBusiness

Nokia Siemens Networks is cutting 17,000 jobs worldwide by 2013 as part of an effort to slash one billion euros ($1.35 billion) in costs and realign the company. 

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The joint venture between Nokia (NOK) and Siemens AG (SI) says the restructuring program will help it target end-to-end mobile network infrastructure and services at a time when the industry is heading in the direction of mobile broadband. 

"These planned reductions are regrettable but necessary.”

- Nokia Siemens CEO Rajeev Suri

The move comes as the joint venture faces strong pressure from Ericsson and Chinese rivals, as well as continued pressures from the broader global economy. 

“We aim to be an undisputed leader in these areas,” Nokia Siemens CEO Rajeev Suri said in a statement. “At the same time, we need to take the necessary steps to maintain long term competitiveness and improve profitability in a challenging telecommunications market.”

Nokia notes that businesses deemed unnecessary to its long-term growth strategy will be divested or managed for value, and suppliers will be significantly reduced in order to lower costs and improve quality.

The company is aiming to slash a billion euros over the next two years, largely from organizational streamlining, which will include 17,000 job cuts, or 23% of its global workforce.

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“As we look towards the prospect of an independent future, we need to take action now to improve our profitability and cash generation," said Suri. "These planned reductions are regrettable but necessary.”

Measures taken by Nokia are expected to involve the elimination of its matrix organization structure, site consolidation, transfer of activities to global delivery centers, consolidation of central function and cost synergies from the integration of Motorola’s wireless assets.

It will also lower its investments in real estate, information technology and reduce general expenses.

To help ease the job cuts, Nokia Siemens says it will launch locally-led programs at the most affected sites to provide re-training and re-employment support.

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