Nokia Siemens Networks, the telecommunications equipment joint venture of Nokia Oyj (NOK1V) and Siemens AG (SIE), plans to cut as many as 1,500 positions from assets acquired from Motorola Solutions Inc., a spokesman said.
The reductions amount to about 22 percent of the 6,900 workers added when Nokia Siemens bought the Motorola units in April to add business with customers including Verizon Wireless, Sprint Nextel Corp., KDDI and China Mobile.
Nokia Siemens said in July that it wants to improve its competitiveness “as a standalone entity” and ended talks about a possible stake sale to private-equity investors. The Espoo, Finland-based joint venture, which has been unprofitable for all but one quarter since it started in April 2007, added workers in locations including Arlington Heights, Illinois, and Swindon, England as well as China, Russia and India when it took on the Motorola unit.
“The parents still have a barely breakeven business on their hands, and there’s more work to be done on the Nokia Siemens side too,” said Sami Sarkamies, a Helsinki-based analyst at Nordea Bank. “I’d expect a more comprehensive profitability improvement plan including job cuts in the coming weeks or months, especially if they intend to target an IPO in a few years.”
The job cuts were already public “in some places but not others,” Ben Hunt, a Nokia Siemens spokesman, said in a phone interview. The schedule will vary by location, he said.
Nokia Siemens paid $975 million for the assets, which include wireless technologies based on the CDMA standard used by Verizon Wireless and Sprint Nextel as well as some Asian carriers. The price dropped from $1.2 billion as the acquisition took close to a year because of approval difficulties in China.
The wireless business at Nokia Siemens is rooted in the GSM standards used by most carriers outside the U.S. and east Asia. Motorola also sold GSM systems as well as gear based on CDMA, which is used by some North American and east Asian carriers, and so-called fourth-generation technologies LTE and WiMAX. Nokia Siemens already supplies LTE, which has become the dominant fourth-generation technology.
The company will also transfer as many as 1,200 former Motorola employees internally as it reorganizes assets including the acquired GSM and WiMAX networks businesses, Hunt said. Nokia Siemens had about 73,000 employees worldwide at the end of the second quarter.
A consultation process with employees in Swindon began on July 25 with the aim of cutting 150 jobs by the end of June 2012, Hunt said.
To contact the reporter on this story: Diana ben-Aaron in Helsinki at firstname.lastname@example.org