Nov. 3, 2009 (Hugin AS) -- Corporate news announcement processed and transmitted by Hugin AS.
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Company sets goal to reduce annualized operating expenses and
production overheads by EUR 500 million by end 2011 compared to end
2009
Nokia Corporation
Stock Exchange Release
November 3, 2009 at 13:00 (CET +1)
Espoo, Finland - Nokia (NYSE:NOK) Siemens (NYSE:SI) Networks today announced its plan to
improve financial performance and return to growth. The plan includes
reorganizing the company's business units to better align with
customer needs; extensive operating expense and production overhead
reduction, including a global personnel review; ongoing purchasing
savings; expanded partnering to ensure a full portfolio of
world-class products and services; and potential acquisitions where
assets would add scale to existing product areas or customer
relationships.
"As our customers make purchasing decisions, they want a partner who
engages in issues well beyond a traditional discussion of
technology," said Rajeev Suri, chief executive officer of Nokia
Siemens Networks. "Business models, innovation, growth and
transformation are now very much front and center when it comes to
the selection of a technology partner - and our planned new structure
will position us well in this changing market."
Reorganization
The Company's five business units are planned to be realigned into
three, each targeting a specific customer focus area. The planned new
business units, which are expected to come into effect on January 1,
2010, are:
- Business Solutions, which will focus on helping customers generate
new revenue and differentiate from the competition by providing a
faster time to market for end-user services; enhancing billing and
charging capability; automating and simplifying processes; addressing
the challenges of convergence; and tapping into rich subscriber data
to deliver a unique customer experience. Jürgen Walter, currently
head of the company's Converged Core business unit, will assume
leadership of the Business Solutions organization.
- Network Systems, which will focus on providing both fixed and
mobile network infrastructure, including the company's innovative
Flexi base stations, core products, optical transport systems, and
broadband access equipment. Marc Rouanne, currently head of the
company's Radio Access business unit, will assume leadership of the
Network Systems organization.
- Global Services, which will focus on helping customers improve
operational efficiency through outsourcing of their non-core
activities; supporting and managing their networks with robust
customer care offerings; and ensuring fast and cost-effective
implementation of new networks and network upgrades. Ashish
Chowdhary, currently head of the company's Services business, will
assume leadership of the Global Services organization.
Rouanne and Walter will join the Company's Executive Board, effective
January 1, 2010. Chowdhary is already a member of the Executive
Board and will remain so in his new role.
Cost reductions
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.
As a result, Nokia Siemens Networks will target a reduction of
annualized operating expenses and production overheads of EUR 500
million by the end of 2011 compared to the end of 2009. The company
estimates that total charges associated with these reductions will be
in the range of EUR 550 million over the course of 2010-2011.
The operating expense and production overhead savings are expected to
come from a wide range of areas, including real estate, information
technology, site optimization, strategic workforce rebalancing, and
overall general and administrative expenses. As part of this effort,
the company will also conduct a global personnel review which may
lead to headcount reductions in the range of about 7-9 percent of its
current approximately 64,000 employees.
Specific country impact may be higher or lower than the now estimated
global 7-9 percent range and the company will only provide further
details related to this intended action when the review and planning
process has progressed and employee representatives have been
involved where required.
