Nokia Siemens Network to cut 17,000 jobs worldwide by 2013

Struggling telecoms infrastructure provider Nokia Siemens Network (NSN) has announced it is to slash a whopping 17,000 jobs from its global workforce by 2013 in an effort to streamline its organisation and improve profitability.

The firm said the cuts would help it save over €1bn by 2013 and that it would also look to reduce its real estate portfolio, administrative expenses and contracts with suppliers as further cost-cutting measures.

Chief executive Rajeev Suri said the cuts would help the firm refocus on its core offerings including an enhanced range of mobile broadband services, an area where the firm will continue to invest for research purposes.

"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," he said.

"Despite the need to restructure parts of our company, our commitment to research and development remains unchanged, with investment in mobile broadband expected to increase over the coming years."

V3 contacted NSN for more information on where the cuts would be made but the firm refused to comment.

Gartner research vice president Bettina Tratz-Ryan told V3 the size of the cuts was a surprise but the firm had been forced to take drastic action by its inability to evolve and increasing competition from other firms.

"Their end-to-end technology focus is too deep, and now the company is focusing on the core trend of mobile broadband and end-to-end network and service integration," she said.

"Companies such as Ericsson and Alcatel Lucent have done these deep reorganisations earlier and Huawei is growing through cost leadership and innovation potential."

Tratz-Ryan added that the size of the cuts indicated the firm was making a statement about its intention to become a more dynamic player in the market.

"By announcing the 17,000 job cuts NSN is making it clear to its employees and the industry that it is going for change that make the company leaner and more 'mobile'," she added.

The firm has been struggling for some time and earlier this year confirmed that it was cutting 1,500 jobs from the 6,900 employees inherited from its $1.2bn acquisition of Motorola's telecoms unit, with the first cuts to be made in the UK.

NSN is currently the third-largest mobile infrastructure provider with a 13 per cent market share, behind Chinese giant Huawei on 16 per cent and Ericsson, the clear leader, on 34 per cent, according to figures released in March by Gartner.