The troubled Finnish telecoms giant Nokia is considering slashing 8500 jobs, or around 17 per cent of its workforce, at equipment arm Nokia Siemens Networks, which provides infrastructure for mobile carriers.
Nokia's equipment arm, which is profitable in contrast to its loss-making consumer handsets business, is under pressure as it faces increased competition from rivals such as Sweden's Ericsson and China's Huawei and ZTE.
NSN has already cut 20,000 jobs in the past two years although it still employs over 50,000.
Three sources told news agency Bloomberg that the group is now looking at plans to sell or shut down some plants in Finland, India and China while outsourcing manufacturing. There was no word about whether any jobs in the UK would be affected.
News that Nokia is contemplating more drastic cuts emerged at the same time it took full control of the equipment arm, after buying out joint venture partner Siemens for €1.7bn (£1.5bn).
Nokia announced yesterday that it will rebrand NSN as Nokia Solutions and Services and its corporate affairs department sent out an email to journalists insisting: "NSN's new name spells business as usual."
According to Bloomberg, Nokia has made no final decision about the cuts and a spokesman declined to comment.
Nokia, a darling of the stock market a decade ago, has fallen far behind Apple and Samsung in the smartphone wars, with revenues at its consumer arm tumbling 6 per cent in the past quarter. The number of mobile devices sold plunged 27 per cent.
The better-performing equipment division has helped to stem losses but revenues still fell 1 per cent in the past three months.
Despite taking control of NSN, Nokia chief executive Stephen Elop has said he does not plan to integrate it with the rest of the company, which lost €607m in the first six months of 2013. Nokia and Siemens held talks with private-equity buyers in 2011 about selling NSN but dropped the idea.Reuse content