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Monday, 07 May 2007 |
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Cuts begin at Nokia Siemens.
Some five weeks after the merger of the two companies was formalised Nokia Siemens Networks is starting the process of reducing its headcount. Job losses are expected to total 9,000.
The company has revealed that it has started talks with employees and their representatives over its proposed headcount reductions in
Finland and
Germany. In June 2006 when the merger of Nokia and Siemens was first announced the expectation was that overall job losses would amount to 10-15% of the combined 60,000 strong workforce and this is still apparently the target figure.
Simon Beresford-Wylie, chief executive officer of Nokia Siemens Networks, said that the job losses were necessary to enable the company to compete now and in the future. “I know that the planned actions announced today will be difficult for some, but it is our responsibility to create a winning company that can provide strong future opportunities for employees, adequate returns for our shareholders, and cost-competitive products, services and solutions for our customers.”
In order to preserve jobs while providing flexibility for the company, some of the planned reductions are expected to be transfers to research and development (R&D), manufacturing, and other partners of Nokia Siemens Networks. The previously announced cost synergy goal of €1.5bn annually by the end of 2010 remains unchanged.
“While we have a great opportunity now that we are Nokia Siemens Networks, we also have to face the reality of the market,” said Christoph Caselitz, the company’s chief market operations officer. “Many of our customers are facing intense cost pressure, relentless competition, and new business models. We must make the tough changes necessary to adapt to this reality and lower the cost of connectivity if we are to succeed in our vision of having five billion people in 2015 enjoying the benefits of being connected.”
Nokia Siemens Networks is initially proposing job losses of 700 in
Finland and this will increase to 1,500 to 1,700 by 2010, including the initial figure. Losses in
Germany have not been quantified as the company is still consulting with employee representatives but given the target figure German job losses will be significantly higher than those in
Finland.
Ian Channing |
