MUNICH, Germany — Only two weeks after having published massive losses in its third quarter, network equipment vendor Nokia Siemens Networks (NSN) has announced far-reaching restructuring plans.
The restructuring plan includes a global personnel review. In this context, 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'. In addition, segments such as real estate and information technology will have to contribute significantly to the savings plan. In addition, 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).
The cost-cutting measures will be accompanied by a thorough restructuring. 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.
The third business segment, baptized Global Services contains outsourcing offerings ranging from technical support to managing and even operating complete telecommunications networks. Also 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.
Some activities have better chances than others to get off lightly: 3G deployment, LTE development, and subscriber data management solutions. NSN regards them as its "crown jewels", the spokesperson explained.
Despite all the job cutting and cost reduction efforts, the company already hints at acquisitions. The company declined to elaborate, but any takeover has to be regarded under the aspect of completing the product spectrum in the light of the company's changing focus, the spokesperson said.
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