NSN: German and Finnish workers to be called into co-determination negotiations table shortly

Some details from planned personnel cuts of Nokia Siemens Networks surfaced today. Negotiations with the workers representatives are about to start and the company plans to cut 2900 jobs in Germany and 1200 jobs in Finland. In November the company said that the aim is to do away with 17 000 man-years of labour by the end of 2013 as a part of an effort to realize one billion in annual savings.

This time the cuts in Finland are expected to hit hardest in Espoo with 700 jobs at risk but Tampere’s number (350) appears to have come more out of the blue. Oulu is also set to lose up to 150 positions of employment. Employee representatives commented that a lot of workers are even relieved that the call for co-determination negotiations finally came, as they have felt like they have been hanging by a thread ever since the November announcement.

Normally when an organization is expecting such news, efficiency suffers. This is not much different from the wider argument made against ever stricter austerity measures demanded from a country under fiscal duress. NSN, a joint venture of Nokia Oyj (OMX: NOK1V, NYSE: NOK) and Siemens AG (FWB: SIE, NYSE: SI), has been in a continuous cycle of weak profitability followed by threat of personnel cuts since its inception in 2007. Its largest competitors are Ericsson AB (OMX: ERIC B, NASDAQ: ERIC) and Huawei Technologies Co.

Nokia Siemens Networks is focusing on mobile broadband and services. In Germany most of the cuts are expected to be from fixed networks and operations will be concentrated on fewer locations. German union is planning to protest the measures. Finnish workers have often felt that cuts in Finland are made under far less pretext as jobs cuts for efficiency reasons are much harder to push through in Germany. This time it appears that Germany will take a proportionally heavier blow as 12% of NSN’s n global workforce is in Germany and 11% in Finland.