Nokia Siemens to make staff cuts

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Nokia Siemens Networks has announced that it may cut seven to nine per cent of its 64,000 employees in an effort to reduce annual costs.

The company has set an ambitious goal of reducing annualised operating expenses and production overheads by €500m (£450m) by the end of 2011.

Within their plans for reaching this target, Nokia Siemens Networks will realign its five business units into three - each targeting a specific customer-focus area. The planned business units are expected to come into effect on 1 January, 2010.

The first will be business solutions, a division focused on marketing end-user services, billing and charging, automating processes, addressing issues dealing with convergence and using subscriber data for enhancing customer experience. Jürgen Walter, head of the company’s converged core-business unit, will assume leadership of the business solutions organisation.

Network systems will focus on providing fixed and mobile network infrastructure, including the company’s innovative Flexi base stations, core products, optical-transport systems and broadband-access equipment. Marc Rouanne, head of the company’s radio-access business unit, will assume leadership of the network systems organisation.

Global services will focus on helping businesses outsource their non-core activities, managing networks with customer-care operations and ensuring implementation of new networks and network upgrades. Ashish Chowdhary, head of the company’s services business, will assume leadership of the global services organisation.

In addition to the operating expense and production overhead savings, Nokia Siemens Networks will target an annual reduction in product and service procurement costs. The company also plans to look for opportunities to further strengthen its business through partnerships and acquisitions.

‘We recognise that we are operating in a market where customer needs are evolving fast,’ said Mika Vehvilainen, chief operating officer of Nokia Siemens Networks.

‘We see acquisitions and expanded partnering as important tools to help meet these needs in the fastest, most efficient way possible.’