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Nokia Siemens to cut 17,000 jobs Nokia Siemens to cut 17,000 jobs - 23% of its workforce
(40 minutes later)
The struggling telecoms equipment manufacturer Nokia Siemens Networks is cutting 17,000 jobs. The struggling telecoms equipment maker Nokia Siemens Networks is cutting 17,000 jobs, 23% of its workforce.
The cuts from its 74,000-strong workforce should help cut operating costs by some 1bn euros ($1.35bn; £860m). The losses from its 74,000-strong workforce should help cut operating costs by some 1bn euros ($1.35bn; £860m), the company said.
Nokia Siemens has struggled to make profits so its parent firms are eager to distance themselves from it. The loss-making venture, owned by Finland's Nokia and Germany's Siemens, has faced stiff competition from rivals such as Huawei and Ericsson.
This might result in shares in the subsidiary being listed on the stock market. The owners are considering listing the venture as a separate company.
"As we look towards the prospect of an independent future, we need to take action now to improve our profitability and cash generation," Nokia Siemens chief executive Rajeev Suri said. "This is a big move. I believe the goal is an Initial Public Offering. That cannot be done with the current structure and operation models," said Jari Honko, an analyst at Swedbank.
Mr Suri described the planned layoffs as regrettable but necessary. Nokia Siemens chief executive Rajeev described the planned layoffs as regrettable but necessary.
"We need to take the necessary steps to maintain long term competitiveness and improve profitability in a challenging telecommunications market," he said. "As we look towards the prospect of an independent future, we need to take action now to improve our profitability and cash generation," Mr Suri said.
The firm, which is a joint venture between Finland's Nokia and Germany's Siemens, has said the restructuring program will involve cuts across operations worldwide.The firm, which is a joint venture between Finland's Nokia and Germany's Siemens, has said the restructuring program will involve cuts across operations worldwide.
Shares in Nokia Siemens rose more than 2% to 4.27 euros after the announcement.
Nokia Siemens has been squeezed by market leader Ericsson and increasing competition from Chinese firms Huawei and ZTE.
It is not alone in the industry in announcing large-scale job cuts.
French rival Alcatel Lucent cut 12,500 jobs in 2007 while market leader Ericsson cut 5,000 jobs in 2009 and a further 1,500 in 2010.
Struggling Canadian giant Nortel evenutally filed for bankruptcy protection.
In its last trading statement the firm posted a 16% rise in sales to 3.4bn euros ($4.6bn; £2.9bn) which it said was "driven primarily by growth from the acquired Motorola Solutions networks assets".
Nokia and Siemens announced a 500m euros of additional funding for the joint venture in September to strengthen the firm's financial postion.