Nokia Siemens Networks has just announced a new global restructuring initiative that will result in the loss of a whopping 17,000 jobs. According to a statement released today, the company will "realign its business to focus on mobile broadband (including optical), customer experience management and services." To achieve this, Nokia Siemens plans to reduce its operating expenses and overhead costs by about €1 billion and its workforce by nearly a quarter -- both by the end of 2013. The company explained the job cuts thusly:
"These planned reductions are expected to be driven by aligning the company's workforce with its new strategy as well as through a range of productivity and efficiency measures. These planned measures are expected to include elimination of the company's matrix organizational structure, site consolidation, transfer of activities to global delivery centers, consolidation of certain central functions, cost synergies from the integration of Motorola's wireless assets, efficiencies in service operations, and company-wide process simplification."
No word yet on which countries will receive the brunt of the blow, though the company says it will launch local re-training and re-employment programs in affected areas. The mass layoff is only the latest in a recent spate of Nokia-related cuts, and according to Nokia Siemens CEO Rajeev Suri, it's lamentably necessary. "As we look towards the prospect of an independent future, we need to take action now to improve our profitability and cash generation," the exec said. "These planned reductions are regrettable but necessary - and it is our goal to make them in a fair and responsible way, providing the support we can to employees and communities." Full press release after the break.
Show full PR text
Nokia Siemens Networks puts mobile broadband and services at the heart of its strategy; initiates restructuring to maintain long-term competitiveness and improve profitability

Focuses on mobile network infrastructure and services market
- Targets significant operating expense and production overhead savings
- Plans global workforce reduction of approximately 17,000

Nokia Corporation
Stock Exchange Release
November 23, 2011 at 14.00 (CET+1)
Espoo, Finland - Nokia Siemens Networks today announced its strategy to focus on mobile broadband and services and the launch of an extensive global restructuring program.
"We believe that the future of our industry is in mobile broadband and services - and we aim to be an undisputed leader in these areas," said Rajeev Suri, chief executive officer of Nokia Siemens Networks. "At the same time, we need to take the necessary steps to maintain long term competitiveness and improve profitability in a challenging telecommunications market."

Strategy update
Nokia Siemens Networks will target end-to-end mobile network infrastructure and services, with a particular emphasis on mobile broadband.

"Our goal is to provide the world's most efficient mobile networks, the intelligence to maximize the value of those networks, and the services capability to make it all work seamlessly," said Suri. "Despite the need to restructure parts of our company, our commitment to research and development remains unchanged, with investment in mobile broadband expected to increase over the coming years."

Nokia Siemens Networks plans to realign its business to focus on mobile broadband (including optical), customer experience management and services. The company's Services organization will further strengthen its highly-efficient global delivery system. Business areas not consistent with the new strategy are planned to be divested or managed for value. Quality and innovation will continue to be priorities for the company, with ongoing investment in both areas.

Restructuring program
Nokia Siemens Networks targets to reduce its non-IFRS* annualized operating expenses and production overheads by EUR 1 billion by the end of 2013, compared to the end of 2011. While these savings are expected to come largely from organizational streamlining, the company will also target areas such as real estate, information technology, product and service procurement costs, overall general and administrative expenses, and a significant reduction of suppliers in order to further lower costs and improve quality.

Nokia Siemens Networks plans to reduce its global workforce** by approximately 17,000 by the end of 2013. These planned reductions are expected to be driven by aligning the company's workforce with its new strategy as well as through a range of productivity and efficiency measures. These planned measures are expected to include elimination of the company's matrix organizational structure, site consolidation, transfer of activities to global delivery centers, consolidation of certain central functions, cost synergies from the integration of Motorola's wireless assets, efficiencies in service operations, and company-wide process simplification.

Nokia Siemens Networks will begin the process of engaging with employee representatives in accordance with country-specific legal requirements to find socially responsible means to address these reduction needs. More information will be shared in impacted countries as the process proceeds. In order to reduce the impact of the planned reductions, Nokia Siemens Networks intends to launch locally led programs at the most affected sites to provide re-training and re-employment support.

"As we look towards the prospect of an independent future, we need to take action now to improve our profitability and cash generation," said Suri. "These planned reductions are regrettable but necessary - and it is our goal to make them in a fair and responsible way, providing the support we can to employees and communities."

Conference Call and Webcast
Nokia Siemens Networks will host a conference call for media beginning at 15:00 pm (EET) 14:00 pm (CET) on Wednesday, November 23. The conference call will be webcast live with audio at: www.nokiasiemensnetworks.com/webcast
A dial-in option is also available.
Telephone number: +44 (0) 203 106 4822
Confirmation code: 4484071
A replay of the webcast will be available shortly after the conclusion of the event.