STOCKHOLM -- Struggling network infrastructure vendor Nokia Siemens Networks
is planning to cut 17,000 jobs worldwide, as it aims to cut €1 billion (US$1.35 billion) from its costs by the end of 2013, the company said Wednesday.
About 23 per cent of the company's 74,000 employees will be laid off. The four and a half year-old joint venture between Nokia and Siemens AG has been struggling to compete with Sweden's LM Ericsson and China's Huawei Technologies Co. Parent company Nokia's ongoing problems have made Nokia Siemens' situation even more difficult.
Going forward, the company will focus on mobile broadband and related services. Other areas like its wireline business will be sold or "managed for value," according to Nokia Siemens.
NSN has about 125 sales and technical support staff in Canada. A spokesman for Joy Rychlik, the director of NSN here, said the company isn't breaking down the layoffs by country yet.
Besides savings from staff cuts, NSN will also target areas such as real estate, information technology, product and service procurement costs, overall general and administrative expenses, and aim for a significant reduction of suppliers in order to further lower costs and improve quality, the company said.
Nokia Siemens will now begin talks with employee representatives in accordance with country-specific legal requirements.
“We believe that the future of our industry is in mobile broadband and services – and we aim to be an undisputed leader in these areas,” Rajeev Suri, NSN's chief executive officer, said in a news release. “At the same time, we need to take the necessary steps to maintain long term competitiveness and improve profitability in a challenging telecommunications market.”
In September, Nokia and Siemens together poured in 1 billion euros into the joint venture after fruitlessly looking for an investor. At the same time they appointed Jesper Ovesen as executive chairman of the board. He had been chief financial officer at Danish telecommunications group TDC during the company’s restructuring process and initial public offering.
In April it bought the carrier wireless division of Motorola Solutions Inc. for US$975 million, adding 6,900 employees. Three months later it said it would let 1,500 of them go because of lower demand for Motorola's GSM and WiMAX equipment.