EurWORK European Observatory of Working Life

Nokia Siemens Networks to cut over 1,500 jobs

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Nokia Siemens Networks has announced that it will cut between 1,500 and 1,700 jobs at its Finnish facilities over the next three years. Hundreds of employees at the company’s headquarters in Helsinki walked out in protest after the job reduction plans were unveiled and trade unions accused the company of breaching the Act on cooperation within undertakings.

Job cuts announced

Nokia Siemens Networks (NSN), which began its operations in early April 2007 following a merger between Siemens AG’s COM division and Nokia’s Network Business Group, has announced that it will cut between 1,500 and 1,700 jobs at its Finnish offices over the next three years. The large number of job cuts announced has come as a shock to both staff and the trade unions.

In 2007, some 700 redundancies are set to be implemented by NSN in Finland. The company has given a breakdown of the projected number of redundancies according to region. The largest proportion of redundancies will be implemented in the metropolitan areas of Helsinki and Espoo on the south coast Finland, totalling some 390 job cuts. In Tampere in southern Finland, 240 redundancies are planned, while some 70 job cuts are expected in Oulu in the north of Finland.

In addition to these redundancies, NSN is looking at the possibility of redeploying people to work for its subcontractors. This means that the overall reduction in the number of personnel employed directly by the company could be even greater than the figure which was originally announced (FI0703069I).

Employee protest

On 4 May 2007, managerial staff at NSN’s facilities in Espoo and Helsinki staged a walkout in protest against the announced job cuts. Hundreds of employees at the company’s new headquarters in suburban Helsinki walked out in protest after the job reduction plans were unveiled, according to the representative of the Federation of Professional and Managerial Staff (Ylempien Toimihenkilöiden Neuvottelujärjestö, YTN), Pentti Arpalahti. As Mr Arpalahti outlined: ‘The atmosphere is terrible, even though we have waited for the announcement. People are partially shocked, but there is also resistance rising.’

Mr Arpalahti expressed his surprise that the company was so certain of the number of redundancies needed three years in advance. The YTN representative emphasised that cooperative negotiations are always a particular precondition of such decisions. He added: ‘In my opinion, the Act on cooperation within undertakings (192Kb PDF) does not recognise this kind of negotiation procedure. Now, it seems to be possible to foresee the grounds of collective redundancies.’ The amendment of this act in 1997 reduced the negotiation time in the case of collective redundancies from three months to six weeks (FI0607019I).

Meanwhile, the Senior Employment Relations Official at the Union of Salaried Employees (Toimihenkilöunioni, TU), Harri Kolula, argued: ‘As we are talking about a financially stable company, lay-offs should be avoided. Moving people to new positions within the company must be the primary aim.’

The recently merged company is expected to reveal its precise goals in relation to the job cuts later this year. Several rounds of mandatory cooperation talks between the employer and employee representatives are expected to take place over the next few years.

Corporate responsibility put to test

According to the Chair of TU, Antti Rinne: ‘Nokia Siemens Networks’ programme to strengthen its competitive position is ruthless.’ As Mr Rinne outlined: ‘Talks on corporate responsibility by Nokia’s leadership will now truly be measured.’ The TU Chair advised Nokia to provide for negotiations longer than the six weeks stipulated for employees under the Act on cooperation within undertakings. He added: ‘TU urges the company to safeguard people’s livelihoods and shift from their present jobs to new ones.’

The first round of job cuts will affect employees working in research and development, production and in several business units. The company also expects that some jobs will be transferred to its subcontractors. In Germany, where NSN employs 13,000 workers, the company plans to cut between 2,800 and 2,900 jobs by the end of 2010. Overall, NSN’s global workforce of 60,000 persons is set to be reduced by 9,000 workers.

Pertti Jokivuori, Statistics Finland

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