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Nokia Siemens To Cut Up To 6,000 Jobs After Huge Losses
Published Nov 4, 2009
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German telecom equipment maker Nokia Siemens could reduce its 64,000-strong workforce by seven to nine percent, or by 4,500 to 5,800 jobs, in a cost-cutting drive.
The cost-cutting is to "improve financial performance and return to growth" by reducing 500 million euros (732 million dollars) in annualised operating expenses and production overheads by 2011, the company said.
"As part of this effort, the company will also conduct a global personnel review which may lead to headcount reductions in the range of about 7-9 percent of its current approximately 64,000 employees," it added.
Nokia Siemens' woes have dragged down parent companies Nokia of Finland and Siemens of Germany.
Nokia, the world's biggest mobile phone maker, last month reported its first quarterly loss in a decade partly due to a 908-million-euro impairment charge for goodwill in the Nokia Siemens joint venture.
It launched in early 2007 and immediately announced job cuts in both Finland and Germany, reducing its workforce to 17,500 people from 22,000 employees.
"Despite having fully achieved the original merger integration savings objective of Nokia Siemens Networks, changes in the global economy and competitive environment make further cost reductions necessary," the company said.
The Finnish-German business did not say which countries would be affected by the job cuts, but indicated these could be larger than nine percent of the workforce in some of them.
"Specific country impact may be higher or lower than the now estimated 7-9 percent range and the company will only provide further details related to this intended action when the review and planning process has progressed and employee representatives have been involved where required," the company said.
It estimates its cost-cutting drive, which includes cost reductions in real estate, general expenses and administrative costs, will cost 550 million euros in 2010 and 2011.
Nokia Siemens' mobile telephone and Internet networks division, operating on a market already dominated by Swedish rival Ericsson, is facing rising competition from new players such as Chinese firm Huawei.
Many other players in the sector, such as Alcatel-Lucent of France, are also facing difficulties, as prices fall because of a global decrease in demand.
Ericsson said in July it would buy the carrier networks division of Canada's failed Nortel Networks.
At around 1320 GMT, Nokia's shares were down 0.46 percent to 8.68 euros, in a market down 1.2 percent.
Posted by
VMD - [Virtual Marketing Department]
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