Nokia Siemens Networks believes that in order to get itself back on a path to profitability it need to take the drastic step of laying off about 17,000 employees by the end of 2013 and shut down units it deems not relevant to its long-term strategy.
The layoffs are part of a broader company effort to align its workforce with a new strategy in addition to a range of productivity and efficiency measures, reports FierceWirelessEurope.
Following a number of failed attempts to sell itself off to another vendor or venture capital firms, in September, Nokia and Siemens made a joint $1.36 billion investment in the venture to keep it afloat.
Among the many efficiency measures NSN plans to take are the elimination of its matrix organizational structure, site consolidation, transfer of activities to global delivery centers, consolidation of certain central functions, cost synergies from the integration of Motorola's (NYSE: MMI) wireless assets, efficiencies in service operations, and companywide process simplification.
Its "exit or maintain" list has categorized each of its business units into four buckets: lead, attach, adapt and exit or maintain.
Per its new strategy, mobile broadband and customer experience management are in the lead category. The customer care and network management units of NSN's global services arm have a place on the attach list, while optical networks, managed services and consulting/integration units of global services are on the adapt list. However, the perfect voice (fixed-line VoIP), broadband access, WiMAX, narrowband, carrier Ethernet, business support systems (BSS), and communications and entertainment solutions have been cited as possible businesses to either maintain or exit.
In an e-mail memo to its employees, Rajeev Suri, chief executive officer, confirmed that NSN may either opt out or realign a number of businesses including "perfect voice (fixed-line VoIP), broadband access, WiMAX, narrowband, carrier Ethernet, business support systems (BSS), and communications and entertainment solutions (CES)." Each of these businesses "will be targeted for exit (possibly through divestment) or put in maintenance mode."
Upon completion of the restructuring, the vendor said it wants to capitalize on new mobile broadband network and professional services, a segment it values at EUR70 billion ($93 billion) in 2011.
"We believe that the future of our industry is in mobile broadband and services--and we aim to be an undisputed leader in these areas," said Suri. "At the same time, we need to take the necessary steps to maintain long term competitiveness and improve profitability in a challenging telecommunications market."
For more:
- here's FierceWirelessEurope's take
- the New York Times has this article
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