Nokia Siemens Networks (NSN), which manufactures equipment for mobile telephone networks, plans to cut between 4,500 and 5,800 jobs worldwide. The company hopes to save EUR 500 million by the end of 2011. NSN says that it needs to cut between seven and nine per cent of its workforce of about 64,000. NSN also plans to reform its organisation: its five business units are to be regrouped into three units.
The Finnish chief shop steward for office workers at Nokia Siemens Networks, Pentti Arpalahti, said that the cuts in Finland will probably focus on the Helsinki region and Tampere. "The situation seems worrisome. It could be that at least 1,000 jobs could go in Finland. As for the other European countries, jobs will certainly be cut in Germany and Italy", he says. Arpalahti also says that the news of the planned job cuts came as a complete surprise.
The biggest problem for NSN is poor profitability. The third quarter interim results showed that the company was in the red again, while its worst competitor Ericsson was making a healthy profit. NSN has also lost market share. The company's CEO Rajeev Suri sees increasing the company's market share to be one of NSN's central goals, and he expects NSN to get back on the path of growth. Suri told Helsingin Sanomat on Tuesday afternoon that no precise decisions on job cuts have been made. Hence he also does not want to anticipate how many jobs would have to be cut from Finland or other countries.
From the spring of 2007, Nokia Siemens Networks has eliminated thousands of jobs. In Finland, NSN has cut 1,400 jobs in the past two and a half years. Nokia has estimated that NSN's market share will decline this year more than had been previously forecast.