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March 26, 2012

Nokia Siemens Works Out Layoff Plan with German Unions

The global economic downturn might finally be turning around, but that doesn't mean every company is going to emerge unscathed. Nokia Siemens is one of the most well respected tech companies in the world but they have hit a bit of a rough patch of late and are looking to cut down on their workforce worldwide. In Germany especially, the company has been working with labor unions in order to come up with a downsizing deal that both parties could live with and it appears such a deal was reached on Friday.

The deal means that Nokia Siemens and the German unions have agreed to allow the company to cut 1,600 jobs in Munich. This is part of a more massive restructuring globally that is expected to see the company shave off as many as 17,000 jobs overall. The company announced last fall that it would be looking to cut off a quarter of its workforce as it sees mounting pressures to compete in a market that is somewhat saturated these days. Rivals in China and from Sweden's Ericsson are causing some real damage to the company. 

While the company did buckle a bit to labor unions in Munich by agreeing to just 1,600 job losses, the company is going to have to cut elsewhere in Germany to arrive at the total 2,900 job cuts. German trade union IG Metall is looking at this deal as a bit of a victory because it means that Nokia Siemens will still keep around 2,000 jobs in Munich as well as keep its German headquarters in the city. The union says that this particular deal will stretch for the next three years.

The unions also said that of the 1,600 jobs being cut, they would look for alternatives to simply having almost 2,000 employees unemployed. Part-time employment and other solutions will be looked at in order to soften the blow a bit. Nokia Siemens said that of the 9,100 Germans that currently work for the company, the 2,900 who will be let go will be cut loose by the end of 2012.

Edited by Jennifer Russell

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