Struggling equipment vendor Nokia Siemens Networks (NSN) has announced details of a wide-ranging cost-cutting and restructuring programme, which could see it shed close to 10 percent of its global workforce. The vendor is targeting annual savings of EUR500 million in operating expenses and production overheads by 2011 (compared to the end of 2009), including potential headcount reductions in the range of about 7-9 percent of its current approximately 64,000 employees. Other savings are expected to come from real estate, information technology, site optimisation and overall general and administrative expenses. The company estimates that total charges associated with these reductions will be in the range of EUR550 million over the course of 2010-2011. “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,” the vendor said in a statement. In common with other Western vendors such as Ericsson and Alcatel-Lucent, NSN has suffered from increased competition from Asian vendors such as Huawei and ZTE. Last month, parent company Nokia announced a EUR908 million write-down at the firm.

NSN also announced a restructuring of the firm’s divisions, reducing it from five to three, each targeted at a specific customer focus area. ‘Business Solutions’ will be headed by Jürgen Walter, currently head of the company’s Converged Core business unit; ‘Network Systems’ – which will focus on providing both fixed and mobile network infrastructure (including the company’s Flexi base stations, core products, optical transport systems, and broadband access equipment) – will be led by Marc Rouanne, currently head of the company’s Radio Access business unit; and ‘Global Services,’ which will be led by Ashish Chowdhary, currently head of the company’s Services business. The planned new business units are expected to come into effect on 1 January next year. “Business models, innovation, growth and transformation are now very much front and centre when it comes to the selection of a technology partner – and our planned new structure will position us well in this changing market,” said NSN CEO Rajeev Suri. The vendor also said it will seek to further strengthen its business through partnerships and acquisitions, noting that it will “target assets that enhance the scale of existing product and service business lines and that deepen relationships with key customers.”