Nokia Siemens to sack 17,000 workers, to save $1.3bn yearly
BY PROVIDENCE OBUH with Agency Reports
As part of its global re-structuring plans aimed at focusing the telecommunications (telecoms) equipment maker on more profitable mobile broadband business, Nokia Siemens Networks has announce plans to cut 17,000 jobs, representing 23 per cent of its workforce worldwide, to save about $1.35 billion a year.
The strategic plan aimed towards achieving improved profitability by reducing operating expenses and overheads by one billion euros ($1.35 billion) by the end of 2013, will affect about a quarter of its 74,000 staff.
Findings revealed that the company jointly owned by Nokia and Siemens have already been forced to inject one billion euros into the joint venture after attempts to sell to a private equity group failed and are expected to take similar charges in order to restructure the business in 2012, although the exact amount has not yet been made clear.
Chief Executive, Rajeev Suri said the venture raised one billion euros to finance the restructuring in late September from its parents, which both put in an additional 500 million. They would not need any further financing at this stage.
Suri stated that the parents have said they want to make the venture more independent, seeing a listing as one of the options within a few years, saying, “As we look toward the prospect of an independent future, we need to take action now to improve our profitability and cash generation.”
He explained that the company will focus on where it has scale as its business focus shifts to mobile broadband, stating that the company will exit several smaller businesses mostly related to fixed line telecommunications.
Regretting the staff cuts by the company, he said it is “regrettable but necessary,” stressing that the planned reductions in staffing is expected to be driven by aligning the workforce with its new strategy, as well as through a range of productivity and efficiency measures.
“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.
At the same time, we need to take the necessary steps to maintain long-term competitiveness and improve profitability in a challenging telecommunications market,” he said.
