After pondering what to do with their wayward joint-venture stepchild, Nokia and Siemens apparently have chosen to retrench and then move forward rather than to abandon the project entirely through divestiture.
As reported this morning by several newswires and others, Nokia-Siemens Networks will lay off up to 5,700 workers globally as part of a move to cut annual costs by euro500 million ($740 million) by 2011.
The provider of wireless-network infrastructure also will realign its operations into three business units from five, effective Jan. 1, and will seek to strengthen its business through partnerships and acquisitions.
Nokia Siemens Networks also will target annual cost reductions in product and service procurement costs.
Regarding the changes, the company said the following in a statement:
“Despite having fully achieved the original merger integration savings objectives of Nokia Siemens Networks, changes in the global economy and competitive environment make further cost reductions necessary.”
Challenging market conditions and intensifying competition from Chinese vendors Huawei and ZTE have been a difficult combination for all the major European telecommunications-equipment players, including Ericsson, Alcatel-Lucent, and Nokia Siemens Networks.