Nokia Siemens Networks, which ended talks to sell a stake in the joint venture, needs to cut jobs if it wants to stay independent and compete with rivals, according to a Standard & Poor's analyst.
"They haven't fired enough," James Crawshaw, an equity analyst at Standard & Poor's, told Bloomberg. "Siemens historically over-engineered their products and in certain industry verticals people will pay for that, but the telecom sector isn't prepared to pay that premium for German engineering when Chinese engineering gets the job done."
According to Bloomberg, NSN made sales of about $254,000 per employee last year, which is 19 percent less than rival Ericsson. The joint venture has been unprofitable for all but one quarter since it started in April 2007. It has increased its employee count to about 73,000 from about 60,000 after additions for outsourcing and the acquisition of a Motorola Solutions.
An initial public offering (IPO) could be an answer, but the company has yet to gain profitability. Nokia said last week that it's open to other ownership options for the joint venture, but it didn't give details.
- see this Bloomberg article
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