Nokia Siemens Networks (NSN), the joint venture between Nokia and Siemens, today announced new strategic initiatives with a generic aim to taking the company back into black and triggering positive growth trends for the financially troubled JV.

Workforce and Cost Savings:

 As part of the new business plan, the firm will initiate a process to reduce its work force by 7-9%  i.e. about 5,700 jobs will vanish across the globe. NSN has termed the move as ‘global personnel review.’ NSN estimates to save euro 500 million through this move though it will initially have to incur a charge of euro 550 million for couple of years starting next year.

The company says that country specific numbers for work reductions will be identified in the coming days.

The company has shrunk the present five business units to three namely Business Solutions, Network Systems and Global Services with the last business division to be headed by Ashish Chowdhary who is currently Head of NSN’s Services business.

Partnerships & Acquisitions:

“We recognize that we are operating in a market where customer needs are evolving fast,” said Mika Vehvilainen, chief operating officer of Nokia Siemens Networks. “We see acquisitions and expanded partnering as important tools to help meet these needs in the fastest, most efficient way possible.”

NSN said that it will target assets that enhance the scale of existing product and service business lines and that deepen relationships with key customers.

What the move means to the JV:

The new announcements should put to rest, atleast for the time being, all speculations pertaining to apprehensions that the JV may fall out. The apprehensions appeared more profound when Nokia recently wrote off $1.35 billion goodwill stake in the JV.

The move appears to be another effort to bring about change in the financial performance of the company. NSN recently reported yoy as well as sequential drop in Q3 09 revenues. Sales in Asia-Pacific were the most hit with over 36% drop in sales. Operating loss for the company was $ 1.1 billion.

NSN move is not unusual and in line with the trends witnessed for incumbent vendors off late. Ericsson, Alcatel-Lucent and Motorola have already announced cost saving measures. In fact such move is now considered to be a proactive measure. Stakeholders too should not mind the move since it is better to be in existence than to go into doldrums like Nortel.

“As our customers make purchasing decisions, they want a partner who engages in issues well beyond a traditional discussion of technology,” said Rajeev Suri, chief executive officer of Nokia Siemens Networks. “Business models, innovation, growth and transformation are now very much front and center when it comes to the selection of a technology partner – and our planned new structure will position us well in this changing market.”

The new measures will come into effect from January 01, 2010.