Nokia Siemens Networks announced plans to cut 17,000 jobs, as it looks to lower costs and refocus its business on mobile broadband. The restructuring comes barely two months after the appointment of Jesper Ovesen as executive chairman of NSN. Nokia and Siemens named the new executive after agreeing to each inject another EUR 500 million in the loss-making network equipment venture. They earlier attempted to sell part or all of the company to private investors, but could not find interested buyers. Going forward, NSN will focus on end-to-end mobile network infrastructure and services, with a particular emphasis on mobile broadband. This includes optical systems, customer experience management and network services. Other activities will be sold or "managed for value", the company said. Another cost-reduction programme will start, aimed at reducing annual operating expenses and production overheads by EUR 1 billion by the end of 2013, compared to the end of 2011. The savings will come largely from organizational streamlining, as well as real estate, IT, procurement, overall general and administrative expenses, and a "significant reduction" in suppliers. The 17,000 job cuts, out of a total workforce of 74,000 at the start of November, will be completed by the end of 2013 and focus on elimination of the company's matrix organizational structure, site consolidation, transfer of activities to global delivery centres, consolidation of certain central functions, cost synergies from the integration of Motorola's wireless assets, efficiencies in service operations, and a company-wide process simplification. Employees at the most affected sites will receive training and re-employment support. CEO Rajeev Suri said the cuts are regrettable, but are needed to improve profitability, conserve cash and weather a "challenging" market.
