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Nokia Plans Major Job Cuts

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NOKIANokia Siemens Networks (NYSE:SI)announced on Wednesday that the company is planning to cut around 17,000 jobs across the world by 2013 as a part of its cost cutting drive .

Nokia Siemens Networks, A joint venture between Nokia Corp. (NYSE:NOK) and Siemens AG and is currently the world’s second largest makers of mobile infrastructure said in a statement earlier today that the company is planning to cut around 17,000 jobs across the world by 2013 as a part of its cost cutting drive . The company will be slashing 23 percent of its total workforce in order to reduce the costs by about $1.35 billion or 1 billion euros.

Nokia Siemens Networks said that the company is going to undergo major restructuring in order to be more flexible and efficient against the competition from rival Asian companies. The company is responsible for making the essential mobile network infrastructure required for cell phones to connect and communicate with other mobile devices and is currently exploring the possibility of outsourcing the services to reduce the number of suppliers.


The chief executive officer, Rajeev Suri in a statement said that the company will continue pushing network outsourcing in order to reduce its focus on field maintenance deals and concentrate on using the global delivery capabilities to carry out remote management from the Nokia Siemens centers located in India and Portugal in order to transform those businesses to pick up and generate more revenue.

The Nokia-Siemens joint venture is a 50-50 partnership formed in 2006 and the company has been facing issues regarding the profits, and the condition has worsened by the recent global economic slowdown. The company currently faces challenge from Chinese telecommunications giants like Huawei Technologies and ZTE Corp. (PINK: ZTCOY). Earlier in the previous year, Nokia Siemens increased its foothold in the American market by acquiring a majority in the Motorola (NYSE:MSI)’s wireless operations for $1.2 billion. This deal has given Nokia Siemens Networks the access to top wireless carriers in the United States including AT&T Inc. (NYSE:ATT), Verizon (NYSE:VZ) and Sprint Nextel Corp. (NYSE:S) depending upon the technology provided by the infrastructure suppliers.

According to the statement, Nokia Siemens is mainly focused on mobile broadband and services and restructuring the organization to improve its profitability and competitiveness for a long term. Suri said that the company believes that the future is in mobile broadband and services, which is expected to see a huge growth in the coming years and Nokia Siemens Networks aims to be the undisputed leaders in those segments. He also said that the planned layoff is regrettable but unavoidable.

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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