Nokia Siemens Networks (NSN) announced earlier this week that it will cut 1,500 jobs from the recently acquired Motorola Solutions division. NSN confirmed that the sectors to be hit will be R&D, supply chain and sales all related to WiMAX and GSM sectors.
After the closing of the SNS-Motorola Solutions deal in April for $975 million, it became evident that the new venture had difficulties creating revenue and attracting new clients and investors. The Motorola Solutions company had been cumulating unprofitable results for all but one quarter since it started in 2007 and had faced legal trouble over its WiMAX business. As such, NSN had announced possible restructuring in late June. These reductions also reflect the lower demand for WiMAX products and services. The recent months have seen LTE technology (WiMAX’s competitor in the 4G race) take the upper hand in terms of revenue opportunity and industry preference. Business opportunities are growing thinner and the Nokia-Siemens group started shifting its focus to the more profitable sectors.
The overall reduction concerns 1,500 jobs. However, SNS announced that it was aiming at redeploying at least 1,200 jobs to growth areas, such as LTE or WCDMA. SNS’ strategy is to increase its relationship with service operators worldwide who are already LTE clients from Nokia, like China Mobile, Verizon Wireless, Sprint Nextel and many more.
SNS’ announcement is not surprising in the current market situation and WiMAX technology may see further consumer-market oriented companies shifting towards LTE. However, WiMAX still has many opportunities in B2B applications and niche markets requiring high-speed data transfers.