The joint mobile phone venture between Nokia and Siemens, Nokia Siemens Networks, has today announced it may cut as much as 7-9pc of its workforce of 64,000 people as part of plans to improve its financial performance and return to growth.
The group is targeting an annual cost reduction of operating expense and production overheads of €500 million by the end of 2011.
The company estimates total charges associated with these reductions will be in the range of €550 million over the course of 2010-2011.
The savings are expected to come from a wide range of areas, including real estate, information technology, site optimisation, strategic workforce rebalancing, and overall general and administrative expenses.
As part of this effort, the company will conduct a global personnel review, which it said may lead to headcount reductions.
Nokia Siemens said the jobs cuts may be higher or lower in different countries than the 7-9pc cut it is targeting.
While the company would not say where the job cuts would come from, the company said that as the stability of customer relationships is a key priority, disruption to key customer-facing sales positions as a result of this review is “expected to be limited”.
Nokia Siemens Networks is also planning to reorganise its five business units into three – Business Solutions, Network Systems and Global Services – by the start of next year.
Earlier this month, Nokia’s third-quarter results were hit by a €908-million goodwill impairment charge for its involvement in Nokia Siemens Networks. Third-quarter sales at the unit also fell 21pc year-on-year to €2.8 billion.
Article courtesy of businessandleadership.com