HELSINKI // Nokia Siemens Networks, the unprofitable network equipment venture of Nokia Oyj and Siemens, plans to axe 17,000 jobs worldwide by the end of 2013 as it reorganises to focus on mobile broadband.
Nokia Siemens aims to cut 1 billion ($1.3 billion) in annual operating expenses and production costs by the end of 2013 compared with the end of this year, the Espoo, Finland- based company said today.
Nokia Siemens will also build up its services organisation and plans to divest or "manage for value" units that aren't central to its focus, it said. Nokia Siemens employed almost 75,000 as of September 30.
Nokia Siemens received a cash injection of 1 billion from its parent companies in September as Jesper Ovesen, the former chief financial officer of TDC A/S, was named to oversee the restructuring as executive chairman.
The company will simplify its organisation, consolidate sites and functions, and strip out more jobs from the integration of Motorola Solutions units acquired this year, Nokia Siemens said, without giving country details.
"We need to take the necessary steps to maintain long-term competitiveness and improve profitability in a challenging telecommunications market," Chief Executive Officer Rajeev Suri said in a statement. "Our commitment to research and development remains unchanged, with investment in mobile broadband expected to increase in coming years.
The company has not yet decided how many jobs will be cut per country, company spokeswoman Jozefa Terloo said yesterday by telephone from Munich. Negotiations with worker respresentatives in each country will start immediately, she said.
"As we look towards the prospect of an independent future, we need to take action now to improve our profitability and cash generation," said Mr Suri. "These planned reductions are regrettable but necessary - and it is our goal to make them in a fair and responsible way, providing the support we can to employees and communities."
As part of the restructure the company put much of its faith in mobile broadband to revive its fortunes.
Mr Suri said: "We believe that the future of our industry is in mobile broadband and services - and we aim to be an undisputed leader in these areas. Our goal is to provide the world's most efficient mobile networks, the intelligence to maximise the value of those networks, and the services capability to make it all work seamlessly."
* with Bloomberg and Reuters