Nokia Siemens to shed 5,700 jobs

Nokia Siemens Networks has lost £500m since last year

Nokia Siemens Networks has announced plans to reduce operational costs by €500m (£447m) by the end of 2011, in a bid to improve its financial performance and return to growth.

Part of the cuts will involve a major headcount reduction of up to nine per cent of the company's 64,000 employees, roughly 5,700 workers, through a " global personnel review".

The cuts follow the telecoms supplier's first quarterly loss since it began reporting its financial performance. The company made a profit of €1.1bn (£980m) a year ago, but has since lost €559m (£500m).

The announcement was made by Rajeev Suri, who took over the role of chief executive at the firm last month.

Nokia Siemens said that it will provide further details related to its intended actions when the review and planning process has progressed, and employee representatives have been involved. The firm added that it would avoid cutting key customer-facing positions in order to maintain stable customer relationships.

Costs will be further reduced with a new company structure. The current five business units will be realigned into three, each targeting the specific customer focus areas of Global Services, Network Systems and Business Solutions.

Costs will also be cut through real estate reduction, IT initiatives and more partnering, Nokia Siemens said.

Suri claimed that the cuts would make the company more attractive to customers and partners.

"Business models, innovation, growth and transformation are now very much front and centre when it comes to the selection of a technology partner, and our planned new structure will position us well in this changing market," he said.