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NSN's slimming cure

December 5, 2012

Struggling telecommunications equipment supplier Nokia Siemens Networks has said more job cuts are required to restore the company's profitability. A couple of subsidiaries will be either closed or sold.

https://p.dw.com/p/16w2W
File photo of a red traffic light is seen next to the German headquarters of Nokia Siemens Networks in Munich REUTERS/Michael Dalder/Files
Deutschland Wirtschaft Nokia Siemens Zentrale in MünchenImage: Reuters

Finnish-German telecom equipment company Nokia Siemens Networks (NSN) said on Wednesday it would close down its Services subsidiary in a bid to help the ailing firm reduce costs. It added that about 1,000 jobs would be lost in Germany as a result of the closure.

NSN announced the subsidiary would stop operating at the end of the year, with employees in 16 different locations to be affected by the move. Management said the Services segment had not been profitable and didn't fit in the company's strategy to focus on broadband mobile telephony.

NSN Germany Chief Executive Hermann Rodler told a staff meeting in Nuremberg that enormous efforts had been made of late to rescue the subsidiary. "Nevertheless, we've continued to be deeply in the red and a turnaround is not in sight," Rodler commented.

Leaner company profile

Rodler added the closure would also be a result of failed negotiations with Deutsche Telekom on a contract pertaining to the maintenance of telephone lines. Germany's service-sector union ver.di said the workforce must not suffer from wrong strategic decisions in the past, urging management to help those to be laid off find new employment soon.

Nokia Siemens Networks also reported it would sell its Business Support Systems subsidiary (BSS) to Canadian IT specialist Redknee which was to take over 1,200 workers.

NSN has been in trouble for many years and is currently in a restructuring process that will eventually cost 17,000 jobs worldwide. At present, the company has a workforce of 74,000.

hg/msh (dpa, dapd, Reuters)