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Nokia Siemens Networks Plans Layoffs, Reorganization

Tue, 11/03/2009 - 6:55am
Maisie Ramsay

Nokia Siemens Networks is planning layoffs and a reorganization of its business units in an effort to return the struggling infrastructure company to growth and profitability.

The company said it may cut between 7 percent and 9 percent of its workforce as part of a plan to cut $733 million from its operating expenses by the end of 2011. Nokia Siemens currently employs about 64,000 employees.

Nokia Siemens said the cost cutting measures were in response to "changes in the global economy and competitive environment."

In addition to the cost-cutting measures, its five business units will be realigned into three: Business Solutions, Network Systems and Global Services. A spokeswoman for Nokia Siemens could not provide details on how today's announcement affects the North America region. 

"As our customers make purchasing decisions, they want a partner who engages in issues well beyond a traditional discussion of technology," said Rajeev Suri, Nokia Siemens Networks' CEO, in a statement. "Business models, innovation, growth and transformation are now very much front and center when it comes to the selection of a technology partner - and our planned new structure will position us well in this changing market."

The news comes less than a month after the company reported a 21 percent slump in sales, which fell to $4 billion from $5.13 billion last year. Nokia Siemens also said its market share would "decline by more than previously expected" in 2009, but did not specify how much the decline would be.

The global infrastructure market has been hit hard by the worldwide economic crisis as operators have cut spending on legacy networks and put off deployments on next-generation technology.

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