Electronics Production | August 27, 2009

Elcoteq streamlines organization, lays off 150

EMS provider Elcoteq has decided to streamlines the organization and start personnel negotiations in Finland.
Elcoteq has decided to combine two current Business Areas, Home Communications and Personal Communications, under a new Strategic Business Unit (SBU), Consumer Electronics. Communications Networks continues as an independent SBU, now named as System Solutions.

Two new members have been appointed to the Management Team; Mr. Sándor Hajnal being responsible for Human Resources and Mr. Tomi Saario being responsible for New Sales and Business Development.

The personnel reductions related to the organizational changes are affecting globally approximately 150 persons. The personnel negotiations in Finland have started today.

Since the beginning of 2008, Elcoteq has had three Business Areas: Personal Communications, Home Communications and Communications Networks. They have been reported as separate segments. Personal Communications and Home Communications Business Areas will now be combined, and in the future the company shall only have two Strategic Business Units (SBU): Consumer Electronics and System Solutions. Both SBUs are responsible for managing and developing their existing customer relationships and applicable service offerings, while Group Operations and Sourcing is responsible for supply chain and production. Consumer Electronics represents approximately 75% of the company's net sales and System Solutions represents approximately 25%.

Consumer Electronics will cover products such as mobile and wireless phones, their parts and accessories, set-top boxes, flat panel TVs and other consumer products. System Solutions will cover wireless and wireline infrastructure systems and modules, enterprise network products and various other industrial segment products.

By combining the Home Communications and Personal Communications segments under the Consumer Electronics SBU, the Company can better utilize the synergies between these businesses. Company aims also at further cost reductions by streamlining and simplifying the organization by removing organizational layers and overlapping roles.

More emphasis is also put on new sales activities which are now under a separate global function, New Sales and Business Development. It focuses on identifying new business opportunities, acquiring new customers and exploring new product segments for the company.

As a result of streamlining the organization, the company is planning some personnel reductions in its group and former Business Area functions. These reductions will affect globally approximately 150 employees. Personnel negotiations have been started today with the personnel representatives in Finland.


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