Nokia Siemens to cut 9000 jobs; layoffs start in Europe

Nokia Siemens Networks today said the company would cut 9000 jobs, about 15% of its total staff, over the next four years as part of an integration program designed to save the combined company EUR 1.5 billion (U.S. $2 billion) annually by 2010.

Nokia and Siemens merged their networks divisions last month, creating one of the world’s largest wireless and wireline infrastructure providers with revenues of EUR 17.1 billion. When the merger was announced on June 19, Nokia and Siemens officials said they would reduce head count by 10% to 15%, and today’s announcement confirms those cuts will be at the upper end of that estimate.

“This is a necessary step to build a Nokia Siemens Networks able to compete now and in the future,” said Nokia Siemens’ new CEO Simon Beresford-Wylie said today in a statement issued from Finland. “I know that the planned actions announced today will be difficult for some, but is our responsibility to create a winning company that can provide strong future opportunities for employees, adequate returns for our shareholders, and cost-competitive products, services and solutions for our customers.”

The layoffs will start in Finland and Germany where Nokia Siemens has approximately 23,000 staff. In Finland, Nokia Siemens will reduce headcount by 700 initially and reduce it by another 800 to 1000 employees by the end of 2010. In Germany, Nokia Siemens will let go 2800 to 2900 employees by the end of 2010. Those cuts will account for half of the headcount reduction, while the remaining half will be in Nokia Siemens other global offices, but the vendor did not say in which countries nor at what time those cuts would take place. In the U.S., Nokia Siemens is divided between the former Nokia U.S. headquarters in Dallas and Siemens North American operations in Boca Raton, Fla.

Nokia Siemens said where possible it will let headcount drop naturally through attrition and would try to place employees within other divisions, particularly R&D and manufacturing or would try to find places for them with Nokia Siemens vendor partners.