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Nokia Siemens cuts jobs in Finland, Germany

12 ноября 2008

Telecom equipment maker Nokia Siemens Networks Tuesday revealed job cuts in Finland and Germany as it enters the final stage of a restructuring plan aimed at achieving EUR2 billion in annual cost savings by the end of 2009.

NSN, the joint venture between Nokia Corp. and Siemens AG, said it plans to cut some 750 jobs in Finland, a move that brings total reductions through restructuring to nearly 1,300. It said at the end of its synergy-related headcount restructuring, it expects to have some 7,000 workers in Finland.

While NSN has already reached agreement with employee representatives regarding the reduction of some 2,300 workers in
Germany, in order to make restructuring targets and due to the "challenging" telecom market conditions, it also said it will close its Munich Hofmannstrasse site, a move that will reduce headcount by 500 workers.

NSN said it has achieved reductions of some 6,000 workers so far and still believes the final total cuts to be near 9,000 employees, or around 10%-15% of its global workforce.

"With the successful completion of these plans, we will have the vast majority of the synergy-related headcount reductions completed and we can then start to put this chapter of our history behind us and focus on creating a world-class company," said NSN Chief Executive Simon Beresford-Wylie.

He said while he is disappointed at having to reduce headcount, it is positive that the company is on track to reach its synergy objectives. He declined to comment on the telecom equipment market overall.

Nokia said in its third-quarter report it aims to reach most of its EUR2.0 billion annual cost synergy target by the end of this year. NSN said Tuesday it's now about two-thirds of the way through the process.

The company also said Tuesday it had reached an agreement for its manufacturing site in
Durach, Germany to be purchased in a management buy-out, led by the current leadership of the facility.
That agreement will result in the transfer of around 500 employees. NSN expects to have some 10,000 workers in Germany after the restructuring is finished.

On top of the large cuts in
Finland and Germany, NSN expects to cut some 50 workers in Egypt and 20 workers in the U.S. Other smaller cuts are expected to be made through early 2009.

HVB analyst Roland Pitz said the news is positive and shows management is following through with its restructuring.

He has a sell rating on Nokia and a EUR11.50 target price.

NSN reported a third-quarter operating loss of EUR1 million on revenue of EUR3.50 billion, while Nokia said it expects the telecom gear market to be flat in 2008 compared with last year.

Network equipment companies, including NSN, LM Ericsson Telephone Co. and Franco-American Alcatel-Lucent have struggled on intensifying competition from Asian rivals, the high cost of network rollouts, excess network capacity and business mix.

Источник: Total Telecom

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