MUNICH, Germany — Despite good figures for the entire Nokia group, the company's infrastructure joint venture Nokia Siemens Networks will have to swallow some bitter pills over the next months. The parent company's latest cost cutting programs make new job cuts probable, especially in the German locations that joint venture Partner Siemens brought into the company.
During the presentation of the quarterly figures, Nokia CEO Olli-Pekka Kallasuvo announced a new cost cutting program for Nokia Siemens Networks which provides for an additional synergy effect of €500 million (about $680 million) annually. In addition, Kallasuvo now plans to reach the goal of reducing costs by €1.5 billion already by end of 2008. Hitherto, the plan had earmarked the 2010 to reach that goal. As the reason for the move, the company quoted the cut-throat price competition in the market for telecommunications equipment. "This development requires determined action", he said.
Indeed, the price war in the telecommunications industry apparently has increased. Nokia Siemens competitor Alcatel Lucent this week had to announce a hefty loss.
No comments:
Post a Comment