Nokia Siemens Networks to Make the Cut

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Nokia Siemens Networks to Make the Cut

By Mintbites

It’s the news that most employees dread – your company is deciding to lay-off jobs. This time Nokia Siemens Networks would be delivering the bad news to around 17,000 of its workers. That is no small figure as the company would be letting go of 23% of its 74,000 employees by the end of 2013. The company has decided to take this drastic measure in order to cut down the overall operating cost by $1.35 billion as it prepares itself for prospective bidders. The company recently acquired Motorola’s mobile network equipment business in 2010 that further added to the overall workforce. Nokia Siemens Networks has been a leading manufacturer of communication network infrastructure that consists of wired and wireless equipment with other competitors such as Huawei, Alcatel and Cisco. This venture between Nokia and Siemens will also come to an end in 2013 after a small time span of four years. It is yet, unclear as which company division would be facing the majority of downsizing but considering that the focus is to generate revenue, it would probably be the landline division according to some analysts.  The wireless division is responsible for generating revenue of around $5 billion.

Once again, China has been emerging as a vicious contender in the wireless infrastructure market particularly in Europe where Nokia Siemens had a strong hold which is falling apart due to competitive prices from Huawei and ZTE. While Ericsson is also a major manufacturer in Europe, it has been doing quite well compared to Nokia Siemens which is the second largest vendor after Ericsson. The company will undergo major restructuring as it hopes to focus on mobile broadband technology and customer experience management after failing to make any significant profit since it was set-up in 2007.  Nokia and Siemens have said to provide investment for the last time. Nokia itself saw an increase in its shares as customers rushed to buy the devices in view of Black Friday sales. In view of the company’s uncertain feature many telecom operators are also rolling out and switching to other vendors.

Another lightly whispered rumor is that Apple might be purchasing Nokia Siemens Networks. The news does sound interesting but a rumor is all that it is. Though Apple has all the market share and power to take a not-so-profitable company under its wing but really why would it do so? However, with news coming in that Nokia Siemens Networks would be laying off 2000 of its workers in India, it would be suitable to dismiss trivial rumors such as the one mentioned before and look at the bigger picture. Business is all about profit which the company wasn’t making; hence, it was inevitable that a step like this would be taken. With Nokia Siemens Networks bowing out of the market, Huawei, Ericsson and ZTE would hold on to their position as the dominant telecommunication vendors. If you had to bet on who would be the last one standing, my vote goes to a Chinese company because most European vendors have already opted out of the market.

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