Nokia Siemens Network prepare for downsizing

Nokia Siemens downsizing

This article was last updated on April 16, 2022

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Nokia Siemens downsizingNetwork-equipment vendor Nokia Siemens Networks said it would cut nearly a quarter of its staff and restructure its business in a last-ditch effort to reach profitability and position itself for independence.

Rajeev Suri, chief executive of the joint venture owned by Nokia Corp. and Siemens AG, said the company would cut 17,000 jobs globally, or 23% of its work force of 74,000, to save €1 billion ($1.35 billion) in annual costs by 2013—double its current target. Mr. Suri also pledged to double down on its mobile broadband businesses, promising to divest other noncore businesses or manage them for value.

“While we plan to reduce our work force significantly, we will not make simple across-the-board reductions. We will focus on doing what we do best,” Mr. Suri said in a conference call Wednesday. He declined to specify which regions would be affected

Up until earlier this year, Nokia and Siemens had hoped they could unload a controlling stake in the unprofitable venture onto a consortium that included private-equity firms Gores Group LLC and Platinum Equity LLC, but the talks fell through. Previous talks with private-equity firms Kohlberg Kravis Roberts & Co. and TPG Capital also fell through.

Instead, in September, Nokia and Siemens injected €1 billion into the struggling joint venture, which recorded a €114 million operating loss in the three months to Sept. 30 despite a 16% rise in revenue to €3.41 billion. They also appointed Jesper Ovesen, the former chief financial officer of Danish operator TDC A/S, as the company’s new chairman.

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