Nokia Siemens Networks’ 17,000-job cut plan looms over workforce in Europe

Nokia Siemens Networks plans to reduce its workforce by 17,000 during the next two years. The firm, whose headquarters are based in Finland, did not provide further details, although according to the company’s financial report, net sales have suffered a fall since 2009 in the US, and the UK and Spain in Europe. While the US only represents 5pc of its global market, Europe accounts for a much larger 34%.

Rajeev Suri, chief executive officer of Nokia Siemens Networks said

“we need to take action now to improve our profitability and cash generation. These 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.”

The group employs some 74,000 people. The planned measures are expected to include elimination of the company’s matrix organisational structure, site consolidation, transfer of activities to global delivery centres, consolidation of certain central functions, cost synergies from the integration of Motorola’s wireless assets, efficiencies in service operations, and company-wide process simplification. In the words of CEO Mr Suri,

“we need to take the necessary steps to maintain long term competitiveness and improve profitability in a challenging telecommunications market.”

The company aims to reduce its operating expenses and production overheads by €1 billion by the end of 2013, compared to the end of 2011. While these savings are expected to come largely from organisational streamlining, Nokia Siemens Network added it will also target areas such as real estate, product and service procurement costs, administrative expenses, and a significant reduction of suppliers in order to further lower costs.

One of its most recent project was the upgrade of Spain’s Telefónica O2’s central London mobile broadband network to meet expectations of huge smart phone demand.

Nokia Siemens Networks announced on Wednesday that will begin the process of engaging with employee representatives in accordance with country-specific legal requirements to find socially responsible means to address these reduction needs. Also,

“In order to reduce the impact of the planned reductions, Nokia Siemens Networks intends to launch locally led programs at the most affected sites to provide re-training and re-employment support.”