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Nov-03-2009Nokia Siemens Networks to cut nearly 6000 jobs(topic overview)
CONTENTS:
- The plan includes reorganizing the company's business units to better align with customer needs; extensive operating expense and production overhead reduction, including a global personnel review; ongoing purchasing savings; expanded partnering to ensure a full portfolio of world-class products and services; and potential acquisitions where assets would add scale to existing product areas or customer relationships. (More...)
- HELSINKI: Telecom equipment maker Nokia Siemens Networks unveiled a new cost-cutting programme on Tuesday, seeking to save over one billion euros ($1.48 bn) to stay competitive in the cut-throat market. (More...)
- As for acquisitions, NSN says it will pursue assets, at the right price, that "enhance the scale of existing product and service business lines and that deepen relationships with key customers." (More...)
- STOCKHOLM (Dow Jones)--Nokia Siemens Networks said Tuesday it is reorganizing its business and may cut jobs to reduce costs and shore up profitability, the latest network equipment vendor to restructure due to challenging market conditions. (More...)
- The cuts are the latest blow for the joint venture, which started operations in April 2007 and then unveiled a 1.5 billion euro cost-savings programme the following month -- later bumped to two billion -- including some 9,000 job cuts. (More...)
- BT Global Services achieves 100 percent availability with business service management solution. (More...)
- The plans also include laying off between seven and nine percent of the 64,000 staff, through a "global personnel review". (More...)
- '''We recognize that we are operating in a market where customer needs are evolving fast,''' said Mika Vehvilainen, chief operating officer of NSN. '''We see acquisitions and expanded partnering as important tools to help meet these needs in the fastest, most efficient way possible.''' (More...)
- According to the firm, the operating expense and production overhead savings are expected to come from many areas, including real estate, information technology and site optimisation. (More...)
- For more great jobs, career related news, features and services, please visit EETimes' Career Center. (More...)
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The plan includes reorganizing the company's business units to better align with customer needs; extensive operating expense and production overhead reduction, including a global personnel review; ongoing purchasing savings; expanded partnering to ensure a full portfolio of world-class products and services; and potential acquisitions where assets would add scale to existing product areas or customer relationships. "As our customers make purchasing decisions, they want a partner who engages in issues well beyond a traditional discussion of technology," said Rajeev Suri, chief executive officer of Nokia Siemens Networks. "Business models, innovation, growth and transformation are now very much front and center when it comes to the selection of a technology partner - and our planned new structure will position us well in this changing market." [1] In addition to the operating expense and production overhead savings, Nokia Siemens Networks will target an annual reduction in product and service procurement costs related to cost of goods sold that is substantially larger than the targeted EUR 500 million in operating expenses and production overhead reductions. This targeted reduction is expected to position the company to meet ongoing customer requirements for competitive pricing. Partnerships and acquisitions Nokia Siemens Networks will seek to further strengthen its business through partnerships and acquisitions.[2]
T elecom infrastructure provider Nokia Siemens Networks may slash 5,760 jobs worldwide, as the entity undertakes cost cutting measures. The company, a joint venture between Finnish cell phone maker Nokia and German conglomerate Siemens AG, is planning to bring down its annual operating expenses and production overheads by 500 million euros by the end of 2011. "As part of this effort, the company will also conduct a global personnel review which may lead to headcount reductions in the range of about 7-9 per cent of its current approximately 64,000 employees," it said in a statement on Tuesday.[3] The cost-cutting is to "improve financial performance and return to growth" by reducing 500 million euros ($A817 million) in annualised operating expenses and production overheads by 2011, the Finnish-German company said. "As part of this effort, the company will also conduct a global personnel review which may lead to headcount reductions in the range of about 7-9 percent of its current approximately 64,000 employees," it added. Nokia, the world's biggest mobile phone maker, last month reported its first quarterly loss in a decade partly due to a 908 million ($A1.48 billion) impairment charge for goodwill in the Nokia Siemens joint venture.[4]
HELSINKI — Nokia Siemens Networks said Tuesday it will lay off up to 5,700 workers globally as part of a move to cut annual costs by euro500 million ($740 million). The mobile network equipment maker — a joint venture between Finland's Nokia Corp. and Siemens AG of Germany — said it will reduce its five business units to three by January, and strengthen its business through partnerships and acquisitions. The savings program could include cutting 7 to 9 percent of its current global work force of some 64,000 employees, the mobile network equipment maker said.[5] TOUGH BLOW The cuts are the latest blow for the joint venture, which started operations in April 2007 and then unveiled a 1.5 billion euro cost-savings programme the following month -- later bumped to two billion -- including thousands of job cuts. Last month, parent Nokia booked a 908 million euro charge for the third quarter due to NSN. It said NSN's markets would fall by five percent in euro terms in 2009 versus 2008, and the venture would lose more market share than expected. NSN said on Tuesday it would shrink its five business units to three as part of the shake-up, and would consider partnerships and acquisitions to boost growth.[6]
NSN reorganization, which would go into effect at the beginning of the new year, would divide the vendor into three operational units: business solutions, network systems and global services. NSN said it would continue to look at more product and technology partnerships, such as its joint venture with Juniper Networks ( NYSE:JNPR ) for carrier Ethernet. It will also look for strategic acquisition opportunities that could augment its product portfolio or increase its customer base. NSN''made just such a strategic bid last summer when it offered to buy Nortel's CDMA and LTE businesses, only to have its offer trumped by Ericsson. On the financial side, NSN plans to reduce its expenses and overhead by 500 million euros (U.S. $733 million) by the end of 2011. As part of that effort, NSN will conduct a head count review, which could result in 4480 to 5760 layoffs, or 7% to 9% of its work force of 64,000.[7] The plan will also see a company wide overhaul of business units, resulting in a reduction from five departments to three. The new business units, which are expected to come into effect from the start of 2010, are: Business Solutions, which will focus on end user services, billing and charging, convergence and subscriber data; Network Systems, which will focus on both fixed and mobile infrastructure, including optical transport systems and broadband access equipment; and Global Services, which will focus on outsourcing and network management. The company said that despite having fully achieved its original merger integration savings, '''changes in the global economy and competitive environment make further cost reductions necessary.''' NSN estimates that total charges associated with these reductions will be in the range of '''550m over the course of 2010-2011. The operating expense and production overhead savings are expected to come from a wide range of areas, including real estate, information technology, site optimisation, strategic workforce rebalancing, and overall general and administrative expenses, which means between seven and nine per cent of its current approximately 64,000 employees face redundancy.[8] The planned new business units, which are expected to come into effect on January 1, 2010, are: - Business Solutions, which will focus on helping customers generate new revenue and differentiate from the competition by providing a faster time to market for end-user services; enhancing billing and charging capability; automating and simplifying processes; addressing the challenges of convergence; and tapping into rich subscriber data to deliver a unique customer experience. Jurgen Walter, currently head of the company's Converged Core business unit, will assume leadership of the Business Solutions organization. - Network Systems, which will focus on providing both fixed and mobile network infrastructure, including the company's innovative Flexi base stations, core products, optical transport systems, and broadband access equipment. Marc Rouanne, currently head of the company's Radio Access business unit, will assume leadership of the Network Systems organization. - Global Services, which will focus on helping customers improve operational efficiency through outsourcing of their non-core activities; supporting and managing their networks with robust customer care offerings; and ensuring fast and cost-effective implementation of new networks and network upgrades.[1]
"Specific country impact may be higher or lower than the now estimated global 7-9 per cent range," the firm said. Nokia Siemens Network would also be realigning its five business units into three -- Business Solutions, Network Systems and Global Services. These new divisions are expected to come into effect on January 1, 2010.[3]
Leading infrastructure service provider Nokia Siemens Networks has announced today that it plans to improve its financial performance and to return to growth. According to the company, the plans include reorganizing its business units, cutting operational expenses, reducing personnel, ongoing purchasing savings, expanding partnering, as well as acquisitions in case the assets can add scale to existing product areas. "As our customers make purchasing decisions, they want a partner who engages in issues well beyond a traditional discussion of technology," said Rajeev Suri, chief executive officer of Nokia Siemens Networks. "Business models, innovation, growth and transformation are now very much front and center when it comes to the selection of a technology partner - and our planned new structure will position us well in this changing market." This unit will help customers with outsourcing of their non-core activities, offering support for their networks, and ensuring fast implementation of new networks.[9] The company has been hard hit by waning demand in the recession and cited "changes in the global economy and competitive environment" for the cost cuts. It said it will also reduce overheads, expand its portfolio and consider acquisitions "where assets would add scale to existing product areas or customer relationships." "As our customers make purchasing decisions, they want a partner who engages in issues well beyond a traditional discussion of technology," said Rajeev Suri, the new chief executive officer of Nokia Siemens Networks.[5] Nokia Siemens Networks plans to cut up to 5,760 jobs as part of a major restructuring program announced today, in a bid to revive the company's growth prospects. The vendor plans to reduce its annual operating expenses by '500 million (US$732 million) by the end of 2011 via a host of cost-cutting measures, including a new streamlined corporate structure, workforce reductions, and reduced product procurement costs.[10] Nokia Siemens Networks (NSN) is aiming for annualised operating expenditure and overhead cost reductions of around '500m ('449m) by 2011. As part of this drive, it said in a statement, it is conducting a "global personnel review which may lead to headcount reductions in the range of about 7-9 percent of its current approximately 64,000 employees". Such cuts would involve between 4,480 and 5,760 people being laid off.[11] According to Nokia Siemens Networks, the cost reductions should rise to EUR 500 million by the end of 2011. The company plans to review its global personnel, and expects for around 7-9 percent of its current number of around 64,000 employees to receive the pink slip, yet the number of layoffs will differ from a country to another.[9]
The company, formed in April 2007 by Nokia, the world's top mobile phone maker, and industrial conglomerate Siemens, saw a 21 percent drop in sales in the third quarter to euro2.8 billion, with an operating loss deepening to euro1.1 billion, from euro1 million a year earlier. Last month, Nokia upgraded estimates for the global network infrastructure market, predicting a 5 percent fall in euro terms in 2009, but warned that it expects Nokia Siemens' loss in market share to be bigger than its previous forecast of a "moderate decline."[5] About Nokia Siemens Networks Nokia Siemens Networks is a leading global enabler of telecommunications services. With its focus on innovation and sustainability, the company provides a complete portfolio of mobile, fixed and converged network technology, as well as professional services including consultancy and systems integration, deployment, maintenance and managed services. It is one of the largest telecommunications hardware, software and professional services companies in the world. Operating in 150 countries, its headquarters are in Espoo, Finland. Engage in conversation about Nokia Siemens Networks' aim to reinvent the connected world at http://unite.nokiasiemensnetworks.com and talk about its news at http://blogs.nokiasiemensnetworks.com Find out if your country is exploiting the full potential of connectivity at http://connectivityscorecard.org About Nokia Nokia (NYSE: NOK) is a pioneer in mobile telecommunications and the world's leading maker of mobile devices. Today, we are connecting people in new and different ways - fusing advanced mobile technology with personalized services to enable people to stay close to what matters to them.[2]
HELSINKI, Nov 3 (Reuters) - Struggling telecom equipment maker Nokia Siemens Networks aims to cut up to 5,800 jobs and save more than 1 billion euros ($1.48 billion) to stay competitive in the cut-throat market. The company will revamp its operations hoping to benefit from its stronger position in offering services to operators.[12] Nov 3 (Reuters) - Nokia Siemens Networks could cut up to 5,800 jobs, aiming to slash annual costs by more than 1 billion euros ($1.5 billion) as telecoms gear maker struggle amid falling prices and lower demand.[13]
The cuts in procurement costs will be "substantially larger" than other cuts, and are being made to "meet ongoing customer requirements for competitive pricing." That could bring the total cost cuts to nearly $1.46 billion. Nokia Siemens said it may cut 7 percent to 9 percent of its 64,000 employees, and that some countries may see job losses higher or lower than that range. Just as Nokia reshuffled its front office and reorganized its handset business in the wake of its $834 million net loss in the third quarter, it now appears that Nokia Siemens--Nokia's joint venture with Germany's Siemens--is restructuring after a period of weak performance.[14] Nokia Siemens, a telecommunications equipment joint venture, plans to lay off up to 5,700 employees, or 7-9 percent of its work force, in order to cut about $740 million in costs.[15]
With intense competition coming from European competitors Alcatel-Lucent and Ericsson and even more fierce rivalry from the upstart Asian vendors, Huawei, and ZTE, selling telecom equipment is getting more cutthroat. The company is dragging down its backers, with Nokia marking down $1.4 billion of its investment in the joint venture during the most recent quarter, despite efforts a year ago to cut costs. Cutting costs is only going to take Nokia Siemens so far, and it's not likely to get it over the hill into profitability and growth.[15]
Struggling telecom equipment supplier Nokia Siemens Networks opnbrktNSNclsbrkt said Tuesday it will slash annual costs by euro500 million ($740 million). To do so, it will condense its business units from five to three and lay off up to 6,000 workers.[16] Nokia Siemens Networks, reeling from weaker sales and declining market share, said it may cut as many as 5,760 jobs as part of a broad restructuring and cost-cutting program. The program includes reducing the number of its business units from five to three and lowering its procurement costs.[14] Just two months into the job, new CEO Rajeev Suri has wasted no time carrying out sweeping changes. As part of the international workforce reduction, Nokia Siemens plans to cut between 7 percent and 9 percent of its 64,000-strong employee base, which is anywhere from 4,480 to 5,760 jobs. The vendor did not specify where those job cuts would be made -- neither the geography nor the business units -- because it has not yet conducted a full personnel review. NSN noted that since "the stability of customer relationships is a key priority, disruption to key customer-facing sales positions as a result of this review is expected to be limited."[10]
Nokia Siemens Networks could lay off more than 4,500 of its workers as part of a cost-cutting drive. The networking firm announced the cuts on Tuesday, alongside its plans to reorganise the company's business units.[11] Ben Roome, head of media relations at Nokia Siemens Networks told IT PRO : '''The industry has changed. and we have been restructuring since we formed.''' '''Unfortunately in the third quarter we knew we would have to look at our cost base need to change to reflect our revenues,''' he added. The main focus of the company'''s statement is a change to its business model, aligning its previous five business units into three as of January 2010. It also said that the company was looking to '''further strengthen its business through partnerships and acquisitions."[17] Nokia Siemens Networks has announced that it is cutting its number of business units from five to three, with the aim of cutting €500 million off its annual operating costs by the end of 2011.[18]
The company, which is a joint venture between Siemens and cell phone maker Nokia, will also whittle down to three business units from five. You wouldn't really get it after reading the headline on its press release which states, "Nokia Siemens Networks Targets Improved Financial Performance, Return to Growth."[15]
Helsinki - Nokia Siemens Networks, the loss-making joint venture between Finnish mobile phone giant Nokia and Germany's Siemens, said Tuesday it plans to cut up 6,000 jobs.[19] Nokia Siemens Networks ( NOK, SIE ), a struggling communications equipment joint venture, today said it will cut its staff of 64,000 by 7%-9% in a broad restructuring. That implies the loss of 4,480 to 5,760 jobs.[20]
Finnish-German telecom equipment manufacturer Nokia Siemens Networks says it could slash up to 5,800 jobs globally in order to cut costs.[21] Telecoms equipment maker Nokia Siemens Networks (NSN) says it may cut its workforce by 7-9% with up to 5,700 jobs being shed from its 64,000 workforce.[22]
Nokia Siemens Networks is planning to shave '''500m off annual running costs over the next 26 months, with cuts that could include six thousand jobs.[23] Between seven and nine per cent of Nokia Siemens Networks' global workforce will lose their jobs in order to reduce costs.[17] "Despite having fully achieved the original merger integration savings objectives of Nokia Siemens Networks, changes in the global economy and competitive environment make further cost reductions necessary," it said in a statement.[6]
Nokia Siemens Networks will target a reduction of annualized operating expenses and production overheads of EUR 500 million by the end of 2011 compared to the end of 2009. The company estimates that total charges associated with these reductions will be in the range of EUR 550 million over the course of 2010-2011.[1] Infrastructure vendor Nokia Siemens Networks (NSN) said Tuesday that almost 6,000 staff face the axe as it seeks to reduce annualised operating expenses and production overheads by '''500m by the end of 2011.[8]
"The operating expense and production overhead savings are expected to come from a wide range of areas, including real estate, information technology, site optimization, strategic work force rebalancing, and overall general and administrative expenses," the company said in a statement issued from Espoo, Finland. "As part of this effort, the company will also conduct a global personnel review which may lead to headcount reductions in the range of about 7-9 percent of its current approximately 64,000 employees," Nokia said.[24] The operating expense and production overhead savings are expected to come from a wide range of areas, including real estate, information technology, site optimization, strategic workforce rebalancing, and overall general and administrative expenses. As part of this effort, the company will also conduct a global personnel review which may lead to headcount reductions in the range of about 7-9 percent of its current approximately 64,000 employees. Specific country impact may be higher or lower than the now estimated global 7-9 percent range and the company will only provide further details related to this intended action when the review and planning process has progressed and employee representatives have been involved where required. As the stability of customer relationships is a key priority, disruption to key customer-facing sales positions as a result of this review is expected to be limited.[1]
The plan includes reorganizing the company's business units to better align with customer needs; extensive operating expense and production overhead reduction, including a global personnel review; ongoing purchasing savings; expanded partnering to ensure a full portfolio of world-class products and services; and potential acquisitions where assets would add scale to existing product areas or customer relationships.[2]
A statement on the company???s website confirmed that it was looking to cut operating expenses and production overheads by '''500 million (''449 million) by the end of 2011. This will include between seven and nine per cent of its 64,000 strong global workforce losing their jobs.[17] The company, a joint venture between Finland's Nokia Corp. (NOK) and Germany's Siemens AG (SI), said it aims to reduce annualized operating expenses and production overheads by EUR500 million by the end of 2011 compared with 2009 through the measures.[25]
The Finnish-German company employs 64,000 people but say it could be forced to make up to 5,800 employees redundant. Bosses say they need to cut operating expenses and production overhead costs by ''898m to "improve financial performance and return to growth".[26]
Meanwhile leading American healthcare company Johnson & Johnson has said it will need to slash between between 6 and 7% of its global workforce in order to cut costs. In a statement the company said they hope the restructuring will generate $1.4bn to $1.7bn in annual savings by 2011. The cuts could mean up to 8,400 employees will lose their jobs but it is not clear whether they will be in drugs, medical devices or consumer products.[26] The restructuring plan includes a global personnel review. The company has announced to reduce its headcount of currently 64.000 persons worldwide by 7 to 9 percent. This amounts to roughly 4500 to 5700 jobs to be eliminated by what the company is calling a'strategic workforce rebalancing'. Segments such as real estate and information technology will have to contribute significantly to the savings plan.[27]
Nokia Siemans makes about a quarter of all mobile phones sold worldwide. In a statement the company said: "As part of this effort, the company will also conduct a global personnel review which may lead to headcount reductions in the range of about 7-9% of its current approximately 64,000 employees."[26] Nokia made no predictions where the cuts would come. "Specific country impact may be higher or lower than the now estimated global 7-9 percent range, and the company will only provide further details related to this intended action when the review and planning process has progressed and employee representatives have been involved where required," Nokia said in its statement.[24]
The company's market share also is expected to decline more in 2009 than Nokia and Nokia Siemens had previously anticipated. In addition to the cost cuts, Nokia Siemens said it would streamline its business structure, actions scheduled to go into effect Jan. 1.[14] NSN, a joint venture of Nokia and Siemens, said it aimed to cut 500 million euros in annual costs by the end of 2011, putting up to 5,800 of the firm's 64,000 staff at risk. It said the programme, something analysts have expected given the persistently tough market conditions, could bring total charges of some 550 million euros in 2010-11. 'They could be making money again in 2011,' said SEB analyst Mats Nystrom. 'They have had catastrophic sales, but with cuts they could reach mid-single-digit margins from 2011. For higher margins, the market needs to turn to the better,' he said.[28] The firm, which was set up as joint venture between Nokia and Siemens, aims to cut annual costs by 500m euros ($732m; £450m).[22]
HELSINKI: Telecom equipment maker Nokia Siemens Networks unveiled a new cost-cutting programme on Tuesday, seeking to save over one billion euros ($1.48 bn) to stay competitive in the cut-throat market. [6] Nokia Siemens says it will reduce its 64,000-strong workforce by up to 9 per cent, or up to 5,800 jobs, in a cost-cutting drive. Telecom equipment maker Nokia Siemens says it will reduce its 64,000-strong workforce by up to 9 per cent, or up to 5,800 jobs, in a cost-cutting drive.[4] HELSINKI--Finnish-German telecom equipment maker Nokia Siemens said on Tuesday that it would reduce its 64,000-strong workforce by seven to nine percent or by 4,500 to 5,800 jobs, in a multi-million cost-cutting drive.[29]
As for acquisitions, NSN says it will pursue assets, at the right price, that "enhance the scale of existing product and service business lines and that deepen relationships with key customers." The new structure Nokia Siemens will streamline its business units from five to three from January 1, 2010. [10] Instead of five business units, the company will consist of only three units in the future: The first one will embrace NSN's ancestral network equipment business in which the mobile network equipment already dominates. The second business segment will be named Business Solutions and embrace a range of solutions and services, including consulting and IT. These products and services will be offered to help NSN's customers to differentiate themselves in the increasingly competitive telecommunications carrier business, a NSN spokesperson said.[27] The company will reorganize from five business units to three, focused on business solutions, network systems and global services.[20]
The new structure, which comes into effect in January 2010, sees the existing five divisions merged into three: Global Services, which takes care of existing customers, Network Systems, supplying the actual hardware for fixed and mobile networks, and Business Solutions, which will focus on pushing advanced billing platforms and "tapping into rich subscriber data to deliver a unique customer experience".[23] The new division will take in the current radio access and broadband connectivity solutions, and parts of converged core business units. Global Services -- This group will provide network outsourcing nad managed services, plus "implementation of new networks and network upgrades."[10]
Jürgen Walter, currently head of the company's converged core unit, will run business solutions; Marc Rouanne, currently head of the vendor's radio access unit, will run the network systems business; and Ashish Chowdhary, currently the company's services chief, will run the global services business. NSN also said it is open to making acquisitions when "assets are available and the associated purchase price of those assets provides the appropriate value."[14] The company plans to reorganize into three business units: business solutions, network systems and global services.[14]
IT solutions enabling NSN's customers to manage charging and billing end users are part of Global Services. This segment already generates almost 50 percent of the company's revenue.[27] Find Solutions for Enterprises, SMBs & Service Providers at the INTERNET TELEPHONY Conference and EXPO East, January 20-22, 2010. Miami, FL. - Global Services, which will focus on helping customers improve operational efficiency through outsourcing of their non-core activities; supporting and managing their networks with robust customer care offerings; and ensuring fast and cost-effective implementation of new networks and network upgrades.[2]
Ashish Chowdhary, currently head of the company's Services business, will assume leadership of the Global Services organization. "Business models, innovation, growth and transformation are now very much front and center when it comes to the selection of a technology partner - and our planned new structure will position us well in this changing market," CEO Rajeev Suri said.[24] Global Services, for managed services and outsourced management, to be headed up by Ashish Chowdhary, currently head of the company's Services business.[18]
The third business segment, baptized Global Services contains outsourcing offerings ranging from technical support to managing and even operating complete telecommunications networks.[27]
"We recognise that we are operating in a market where customer needs are evolving fast," said Mika Vehvilainen, chief operating officer of Nokia Siemens Networks. "We see acquisitions and expanded partnering as important tools to help meet these needs in the fastest, most efficient way possible." It hasn't given details about which parts of the business will be targeted by these redundancies, but did say that certain geographies may be harder hit than others.[30] Profitability and OSS Support: A Return on Investment Analysis of IBM Tivoli Netcool Learn more, download free white paper. "As our customers make purchasing decisions, they want a partner who engages in issues well beyond a traditional discussion of technology," said Rajeev Suri, chief executive officer of Nokia Siemens Networks. "Business models, innovation, growth and transformation are now very much front and center when it comes to the selection of a technology partner - and our planned new structure will position us well in this changing market."[2]
Nokia Siemens Networks shop steward Timo Aalto said Finnish workers were relieved to hear the news on Tuesday.[21]
The Company already has a range of partnerships, including with Juniper Networks in the Carrier Ethernet transport arena. Nokia Siemens Networks will also pursue acquisitions when assets are available and the associated purchase price of those assets provides the appropriate value.[1] Nokia Siemens Networks, based in Espoo just outside Helsinki, is one of the world's biggest makers of wireless networks. It is a 50-50 joint venture of Nokia and Siemens.[5] The news comes about two weeks after NSN, a joint venture between Nokia Corp. and Siemens AG, announced the outsourcing of major company functions, including human resources and marketing, to save money. The changes also reflect that Nokia and Siemens have been unable to unload their stakes in the joint venture. Industry rumor has it each company has lost so much money in the deal that they can't justify it much longer.[16] NSN was set up as a joint venture between Nokia and Siemens in February 2007.[11]
The 50-50 venture of Nokia ( NOK1V.HE ) and Siemens ( SIEGn.DE ) started operations in April 2007 and has 20 percent of the market, but is focusing on improving profit and cash flow. On Oct. 15, NSN said it sees the telecoms gear and services market falling around 5 percent in euro terms in 2009 and said its market share would fall more than it had expected earlier.[13] The Swedish company is the market leader, with a 32 percent market share in the April-June quarter, down from recent years but still well ahead of rivals distracted by the need to integrate mergers. It has the fattest margins in the industry due to greater economies of scale, but the downturn finally caught up with Ericsson in the third quarter, when it missed forecasts and would not say when things might improve. Through the 2005 acquisition of UK-based fixed-line communications maker Marconi, Ericsson expanded onto its rivals' turf. Telecom operators are increasingly offering bundled services of broadband, fixed-line and mobile services to users, so Ericsson felt it had to broaden its reach.[13] China's top telecoms gearmaker overtook Alcatel-Lucent to become third in terms of market share in the first quarter. It strengthened its position in April-June, with its market share roughly doubling year-on-year to 17 percent, supported by aggressive pricing and state financial backing. China's commerce minister said in March both Huawei and cross-town rival ZTE would see 2009 sales rise 30 percent. The company is secretive and its ties to the state are one of the reasons the U.S. government derailed its plans to buy 3Com Corp ( COMS.O ) with Bain Capital last year.[13]
The Franco-American group created in December 2006 had a 12 percent market share in the second quarter. Its history has been dogged by weakening demand, merger-related costs, political infighting and uncertainty over product integration.[13] The company said it will also target annual reductions in product and service procurement costs.[25] NSN also said it aimed for savings "substantially larger" than 500 million euros by lowering procurement costs. "This targeted reduction is expected to position the company to meet ongoing customer requirements for competitive pricing."[6] The company hopes to achieve cost savings at the procurement side. With all measures combined, the company hopes to reduce its costs by 500 million euros (about $740 million).[27]
NSN also said it aimed for savings'substantially larger' than 500 million euros by lowering procurement costs.[28]
STOCKHOLM (Dow Jones)--Nokia Siemens Networks said Tuesday it is reorganizing its business and may cut jobs to reduce costs and shore up profitability, the latest network equipment vendor to restructure due to challenging market conditions. [25] J'rgen Walter, who is now head of NSN's converged core business, will lead the new Business Solutions unit. Network Systems -- This unit will comprise all fixed and mobile network equipment, including Flexi base stations, core products, optical transport systems, and broadband access gear.[10] Jrgen Walter, who heads NSN's Converged Core arm, will lead the Business Solutions organization. The second unit, Network Systems, will concentrate on fixed and wireless network equipment. That will include base stations, optical transport systems and broadband access gear.[16]
The vendor's existing five business divisions are Operations and Business Software; Radio Access; Broadband Connectivity Solutions; Converged Core; and Services. Business Solutions -- This will comprise NSN's operations and business software division plus some elements from the converged core unit such as home location registrar (HLR) functions, consulting, and systems integration, as well as subscriber data management (from its Apertio acquisition).[10]
Now the company is taking drastic steps to stanch the bleeding. Rajeev Suri, CEO of NSN, said the venture will trim its five business units to three to target specific customers.[16] Reorganization The Company's five business units are planned to be realigned into three, each targeting a specific customer focus area.[1]
The plan includes reorganising the company'''s five business units into three.[21]
The plan included forming three business units as opposed to the current five as of January 2010.[19]
The planned new business units, which are expected to come into effect on January 1, 2010, are: - Business Solutions, which will focus on helping customers generate new revenue and differentiate from the competition by providing a faster time to market for end-user services; enhancing billing and charging capability; automating and simplifying processes; addressing the challenges of convergence; and tapping into rich subscriber data to deliver a unique customer experience.[2] Jürgen Walter, currently head of the company's Converged Core business unit, will assume leadership of the Business Solutions organization.[18] Network Systems, to be headed up by Marc Rouanne, currently head of the company's Radio Access business unit.[18]
The company's main business in the UK is in managed network services. It operates Orange's mobile network, as well as T-Mobile and 3's joint 3G network. Its British employees include those brought in when NSN bought Apertio, which manages customer data for mobile operators, in early 2008.[11] The Company will target assets that enhance the scale of existing product and service business lines and that deepen relationships with key customers.[1] Executives particularly want to "enhance the scale of existing product and service business lines. that deepen relationships with key customers," NSN said in a press release. "We see acquisitions and expanded partnering as important tools to help meet these needs in the fastest, most efficient way possible," Mika Vehvilainen, COO of NSN, added in a prepared statement. NSN expects its new structure to be in place as of Jan. 1.[16] "You need to have a good and strong product business," Suri said in the interview. "You need to have a strong services business, and they need to coexist in a symbiotic relationship.[7]
I think what we need to bring to customers, to communications service providers, is really the best products and services package. That'''s what they'''re expecting.[7]
NSN says it will also aim to reduce "product and service procurement costs related to cost of goods sold."[10] Telecom gear makers have been hit hard by the recession, which crimped operator spending, and by tough competition from China's Huawei and ZTE. 'To match the commercial flexibility demonstrated by Chinese vendors, NSN also had to cut back its production, R&D and overhead costs,' said Pal Zarandy, partner at telecoms consultancy Rewheel.[28] The restructing will cost €550 million over the next two years. The company said it would be cutting its 64,000 work force by 7-9%, although it had no further details on where the cuts would fall geographically.[18]
The plan is intended to cut operating expenses by 500 million Euros by the end of 2011.[20] The plan is to cut '''500m from annual expenses by the end of 2011, and includes a new company structure as well as greater emphasis on 'partnerships' and savings from purchasing.[23]
In October, Nokia CEO Olli-Pekka Kallasvuo said the company's networks operations should become "a significant part, as it should be, of the profitability of Nokia, and Siemens too," adding that was "room for new thinking here."[5] Nokia Siemens' main rivals in the mobile infrastructure industry are global market leader L.M. Ericsson of Sweden and French-American company Alcatel-Lucent.[5] The hit was due to a '''908m impairment charge against goodwill associated with infrastructure unit Nokia Siemens Networks.[8] ESPOO, Finland, November 3 /PRNewswire-FirstCall/ -- Nokia Siemens Networks today announced its plan to improve financial performance and return to growth.[2] Nokia Siemens Networks says between 4,500 and 5,800 workers could be made redundant.[21]
Nokia'''s chief executive, Olli-Pekka Kallasvuo, said in a statement: '''The challenging competitive factors and market conditions in the infrastructure and related services business necessitated non-cash impairment charges at Nokia Siemens Networks."[17] Some 64,000 people work for Nokia Siemens Networks. 8,000 of the employees are based in Finland.[21] Emphasize the positive by all means, but the title amounts to wishful thinking, especially given the incredible difficulties the entire telecommunication equipment market faces. Remember Nortel? Like that "Little Engine that Could," Nokia Siemens may think it can, but this isn't a children's story, and it might not have a happy ending.[15]
Telecom equipment maker Nokia Siemans Networks has said it could reduce its workforce by up to 9% in a cost-cutting drive.[26] NSN isn't the only telecom equipment vendor to fair poorly during these lean economic times. Both Alcatel-Lucent ( NYSE:ALU ) and Ericsson ( NASDAQ:ERIC ) reported disappointing third-quarter results,''as''sales in developed and developing markets slow. NSN isn't just facing a down market; it's being battered by the competition. As Nokia CEO Olli-Pekka Kallasvuo acknowledged on Nokia’s Q3 earnings call last month, "It is clear that NSN has lost market share."[7]
Problem is, no one else apparently wants to buy NSN. Now the company is turning to restructuring, which stems from NSN's failure to combat the recession and intense competition from rivals such as Alcatel-Lucent and Ericsson. To that point, NSN watched its third-quarter earnings plunge 21 percent and its operating losses grow ten-fold.[16] None of the restructuring will come cheap, and yes, jobs are at risk. NSN said it will trim its workforce by 7-9 percent.[16]
No details were provided on which geographies will be most affected by the expected job reductions. The company also said it will seek to strengthen its business through partnerships and acquisitions.[20] Despite all the job cutting and cost reduction efforts, the company already hints at acquisitions.[27]
The cuts are the latest blow for the joint venture, which started operations in April 2007 and then unveiled a 1.5 billion euro cost-savings programme the following month -- later bumped to two billion -- including some 9,000 job cuts. [28] Thousands of jobs are at risk at mobile phone giant Nokia Siemans and healthcare firm Johnson & Johnson.[26] Nokia (NYSE: NOK ) is a pioneer in mobile telecommunications and the world's leading maker of mobile devices. Today, we are connecting people in new and different ways - fusing advanced mobile technology with personalized services to enable people to stay close to what matters to them.[1] Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms.[12]
BT Global Services achieves 100 percent availability with business service management solution. [2] Ashish Chowdhary, the top executive for NSN's Services business, will assume the same role for Global Services.[16] NSN is creating the Global Services branch, which will serve as an outsourcer for service providers.[16]
Global Services' projects will include managing and implement networks, for example.[16]
The plans also include laying off between seven and nine percent of the 64,000 staff, through a "global personnel review". [23] The global restructuring moves are "designed to strengthen the company's position as the world's leading global healthcare company," the New Jersey-based firm said.[26]
The company had an operating loss of $1.64 billion in the quarter, compared with an operating loss of $1.48 million in the year-ago quarter.[14] In the third quarter, NSN's sales slumped 21 percent to $4.16 billion.[14]
'''We recognize that we are operating in a market where customer needs are evolving fast,''' said Mika Vehvilainen, chief operating officer of NSN. '''We see acquisitions and expanded partnering as important tools to help meet these needs in the fastest, most efficient way possible.''' [8] The company is also on the lookout for partners and acquisitions to augment the potential to increase revenues. NSN points to its relationship with Juniper for Carrier Ethernet transport as a prime example of the kind of partnerships it's looking for.[10]
We'''ve done two things: Services has grown as a percentage of company revenue, but even within services we have grown or changed the business from a product-attached service set to an independent professional services group.[7]
According to the firm, the operating expense and production overhead savings are expected to come from many areas, including real estate, information technology and site optimisation. [3] Telecom gear makers have been hit hard by the recession, which has crimped operator spending, as well as by tougher competition in recent years from Chinese players like Huawei and ZTE. Market leader Ericsson last month missed forecasts with its earnings and would not say when things might improve. It said the programme, something analysts have speculated could come given the persistently tough market conditions, could bring total charges of some 550 million euros in 2010-11.[6] Nokia shares were little changed by the news, off 1.5 percent at 8.59 euros at 1200 GMT.[6] Nokia today is down 11 cents at $12.64; Siemens is down 57 cents at $61.17.[20]
For more great jobs, career related news, features and services, please visit EETimes' Career Center. [27] The first division, called Business Solutions, will offer back-office, charging, automation and other systems products.[16]
SOURCES
1. Nokia Siemens Networks Targets Improved Financial Performance, Return to
2. Nokia Siemens Network
3. Nokia Siemens Networks may cut 5,760 jobs: Rediff.com Business
4. Nokia Siemens to cut thousands of jobs
5. The Associated Press: Nokia Siemens Networks to lay off up to 5,700
6. Nokia Siemens seeks over 1 bn euros in savings- International Business-News-The Economic Times
7. NSN reorg to slash work force, focus on partnerships, acquisitions | Unfiltered
8. Nokia Siemens Networks to cut 6,000 staff | telecoms.com - telecoms industry news, analysis and opinion
9. Nokia Siemens Networks Plans Cost Reduction, Layoffs - Intends to return to growth - Softpedia
10. Light Reading Europe - Mobile/Wireless - Nokia Siemens Revamps, Cuts Jobs - Telecom News Analysis
11. Nokia Siemens plans thousands of layoffs - ZDNet.co.uk
12. UPDATE 4-Nokia Siemens to cut 5,800 jobs, save $1.5 bln | Reuters
13. FACTBOX-Top players in ailing mobile network gear market | Markets | Markets News | Reuters
14. NSN may cut nearly 6,000 jobs - FierceWireless
15. Like That Little Engine, Nokia Siemens Thinks It Can Make It
16. Nokia Siemens Takes Drastic Steps to Cut Costs : Measures Include Layoffs, Unit Consolidation
17. Nokia Siemens slashes nearly 6,000 jobs | IT PRO
18. Nokia Siemens reorganises to cut costs
19. Nokia Siemens announces jobs cuts - Monsters and Critics
20. Nokia Siemens To Cut Staff Up To 9% In Restructuring - Tech Trader Daily - Barrons.com
21. Nokia Siemens Networks Plans Thousands of Job Cuts | News | YLE Uutiset | yle.fi
22. BBC NEWS | Business | Nokia Siemens to reduce workforce
23. Nokia Siemens Networks to slash almost 6,000 jobs ''' The Register
24. Nokia Siemens lining up work force cuts in savings push :: Editor'''s Blog at Local Tech Wire
25. 2nd UPDATE: Nokia Siemens Networks Launches Cost Cutting Plan - WSJ.com
26. Thousands Of Jobs At Risk At Mobile Phone Firm Nokia And Healthcare Firm Johnson & Johnson | Business | Sky News
27. EETimes.com - Nokia Siemens Networks cuts thousands of jobs
28. UPDATE 3-Nokia Siemens to cut 5,800 jobs, save $1.5 bln - Forbes.com
29. Business - Nokia Siemens to cut 5,000 jobs - INQUIRER.net
30. Nokia siemens networks to slash workforce - The Inquirer
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