ESPOO, Finland -- Nokia Siemens Networks announced today that it is taking steps to strengthen its competitive position in the communications industry. The company has now started sharing its proposed overall headcount reduction plans with employees and plans for Germany and Finland with employees and employee representatives. Similar processes will take place in other countries over the next few months. Actual reductions will occur only after the completion of appropriate consultation processes and in accordance with local legal practices.

"This is a necessary step to build a Nokia Siemens Networks able to compete now and in the future," said Simon Beresford-Wylie, chief executive officer of Nokia Siemens Networks. "I know that the planned actions announced today will be difficult for some, but it is our responsibility to create a winning company that can provide strong future opportunities for employees, adequate returns for our shareholders, and cost-competitive products, services and solutions for our customers. While we are a global company, with more than sixty percent of our employees already outside of Finland and Germany, both Finland and Germany will continue to be major centers of employment for Nokia Siemens Networks."

On June 19, 2006, Nokia and Siemens announced that Nokia Siemens Networks was expected to adjust headcount by 10-15 percent over a four year period from an initial base of approximately 60,000. Nokia Siemens Networks is confirming today that it expects its adjustment to remain within that range, at approximately 9,000 employees, subject to required consultations with employee representatives. In order to preserve jobs while providing flexibility for the company, some of the planned reductions are expected to be in the form of the transfer of personnel to research and development (R&D), manufacturing, and other partners of Nokia Siemens Networks. The previously announced cost synergy targets of EUR 1.5 billion annually by the end 2010 remain unchanged.

"While we have a great opportunity now that we are Nokia Siemens Networks, we also have to face the reality of the market," said Christoph Caselitz, chief market officer of Nokia Siemens Networks. "Many of our customers are facing intense cost pressure, relentless competition, and new business models. We must make the tough changes necessary to adapt to this reality and lower the cost of connectivity if we are to succeed in our vision of having five billion people in 2015 enjoying the benefits of being connected."

The planned headcount adjustment is driven by the company’s response to market conditions, including proposed changes to the product portfolio; site optimization; streamlining of various functions; strategic, long-term R&D and workforce balancing; and other factors designed to build a competitive Nokia Siemens Networks.

As a result of these planned changes, Nokia Siemens Networks is proposing reductions in Finland of 700 employees in the initial consultation process. By the end of 2010, the company expects an adjustment in Finland in the range of 1,500-1,700 employees, including the 700 in the initial consultation process, from an initial base of approximately 10,000. In Germany, Nokia Siemens Networks will start consultations related to the proposed adjustment of 2,800-2,900 employees between now and the end of 2010 from an initial base of approximately 13,000. The company will also evaluate further adjustments in both countries related to the transfer of personnel to business partners.

"Our goal is to treat those who will depart from Nokia Siemens Networks with fairness and respect," said Bosco Novak, head of Human Resources for Nokia Siemens Networks. "This will require close partnership with employee representatives and we look forward to engaging in constructive discussions with them. It is our hope that through those discussions we can bring as much clarity to employees as soon as possible."

Nokia Siemens Networks expects reductions in other countries where it has operations and additional details will be announced as appropriate given country-level consultation processes. While the company is based on a global organizational design, with global business units, functions and other organizations, the planned reductions will be carried out on a country-level, in full accordance with local laws. As the planned reductions will take place over time, some of those reductions may come in the form of regular attrition. While the company will seek to move affected personnel to new positions where possible, there may also be the need to recruit personnel with competencies not currently available in a number of countries.

Nokia Networks