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Nokia Siemens Said to Cut 1,000 Jobs After Contract Loss

Nokia Siemens Networks will announce the closing of a German services unit tomorrow, with as many as 1,000 jobs lost, after failing to renew a contract with Deutsche Telekom AG (DTE), two people familiar with the matter said.

The phone-equipment venture of Nokia Oyj (NOK1V) and Siemens AG (SIE) will close the unit after it failed to extend a five-year contract to service Deutsche Telekom phone cables, and the announcement will be made tomorrow at a staff meeting in Kassel, Germany, said the people, who declined to be identified as the plans aren’t yet public.

Nokia Siemens is stepping up efforts to reduce costs as the global network-gear market is shrinking amid phone operators’ spending cuts. The company said last year it will eliminate 17,000 jobs, or about 23 percent of the total, to make the company sustainably profitable. Those cuts included 2,900 positions in Germany.

The Espoo, Finland-based company said yesterday it agreed to sell its optical networks business with the transfer of as many as 1,900 employees to Marlin Equity Partners, and on Nov. 27 it said it will close a site in Bruchsal, Germany, with 650 employees.

The services unit to be closed, based in Nuremberg, Germany, has about 1,000 employees at 15 sites, according to the company’s website. Nokia Siemens agreed to buy the unit from Deutsche Telekom in 2007.

Alexa von Wietzlow, a spokeswoman for Nokia Siemens, and Christian Schwolow, a spokesman for Deutsche Telekom, declined to comment.

Sueddeutsche Zeitung earlier reported the planned closing of the services unit.

To contact the reporters on this story: Richard Weiss in Frankfurt at rweiss5@bloomberg.net; Adam Ewing in Stockholm at aewing5@bloomberg.net

To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net; Kenneth Wong at kwong11@bloomberg.net

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