The joint venture Siemen and Nokia has decided to cut almost a quarter of its workforce to increase the profit in a stagnating market for network gear. There will be over 17,000 unemployed jobs by the end
of 2013. Currently they are operating with 74,000 employees but after the cut 23% of employees will be terminated out of jobs. The chief executive said that this cut of cost will “trim operating expenses by 1.35 billion.
Reasons for cutting back on employees are because the company is currently operating at a loss. In order for them to get back onto their feet, they had to reduce cost somehow. Although it was, “regrettable [it was a] necessary action that was made, “in a fair and responsible way.” This will definitely create future grudges against employees and companies. The workforce could result in protesting and suing. Perhaps even employee unions will be created to prevent unfair unemployment. This joint venture company should be careful of future implications.