Nokia Siemens Networks (NSN) plans to cut 17,000 jobs in an effort to cut its operating expenses and overhead costs by €1bn (£860m) a year by 2013, the company announced yesterday.
The loss making venture, which is owned jointly by Nokia and Siemens, aims to get rid of almost a quarter of its workforce.
NSN also plans to restructure its business, focusing on mobile broadband while backing off from its fixed-line business.
“This is a big move. I believe the goal is an IPO,” said Swedbank analyst Jari Honko. “That cannot be done with the current structure and operation models.”
The venture, formed in 2007, is the second-largest producer of mobile phones and equipment, but it has struggled with profits since its creation.
“We need to take the necessary steps to maintain long term competitiveness and improve profitability in a challenging telecommunications market,” said Rajeev Suri, chief executive of NSN.
Labour unions in Finland and Germany were shocked by the numbers. “The latest plans are a declaration of fight against the employees,” said IG Metall official Michael Leppek.