Nokia Siemens Networks to cut 17,000 jobs worldwide
HELSINKI—Finnish-German telecom equipment maker Nokia Siemens Networks (NSN) on Wednesday announced a restructuring plan entailing 17,000 job cuts by the end of 2013.
NSN, which on November 1 counted 74,000 employees, “plans to reduce its global workforce by approximately 17,000 by the end of 2013,” it said in a statement, adding that its restructuring plan was aimed at cutting annual costs by one billion euros ($1.3 billion) compared to 2011 outlays.
NSN chief executive Rajeev Suri told reporters and analysts in a conference call and webcast that no decisions had yet been made about specific staff cuts in the company’s global locations.
“We can’t announce that at this stage, just that 17,000 is the final number,” he said.
“These planned reductions are regrettable but necessary – and it is our goal to make them in a fair and responsible way, providing the support we can to employees and communities,” Suri said in the company statement.
According to telecom analyst Sami Sarkamies of Nordea Bank, Wednesday’s announcement was not related to current market difficulties, but rather a desire to achieve synergies not fully explored in the Nokia-Siemens merger and the subsequent acquisition of Motorola’s wireless network assets earlier this year.
Article continues after this advertisement“These changes didn’t come out of the blue, when a new chairman was appointed earlier, they signaled that a strategy update would be coming,” Sarkamies told AFP.
Article continues after this advertisementSarkamies noted that it would take several months for a restructuring program of this magnitude to be carried out, adding that “it is likely to happen in different phases.”
The analyst pointed out that the targeted cost cuts of one billion euros were also likely to have a positive knock-on effect for joint venture partner Nokia.
“Savings of one billion (euros) could translate into a ten-cent EPS [earnings per share] improvement for Nokia,” he explained.
The Nokia share price was down by 0.10 percent at 4.18 euros on the news in late afternoon trading, in a market up by 0.30 percent.
