RPT-UPDATE 1-NSN to cut 1,820 jobs, mainly in Finland, Germany

* In last stage of 2 bln euro cost-cutting programme

* Stock down 2.8 pct, in line with sector index

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By Tarmo Virki

HELSINKI, Nov 11 (Reuters) - Telecom gear vendor Nokia Siemens Networks [NSN.UL] said on Tuesday it would slash around 1,820 jobs, mostly in Finland and Germany, as it enters the last part of its 2 billion euro ($2.58 billion) cost-cutting programme. The news comes one day after Canada's Nortel NT.TO said it would axe 1,300 jobs as vendors try to cope with fierce competition for new business, subdued demand and falling prices. [ID:nN10442062]

"Continued challenging telecommunications market conditions have shown the need for further reductions," Nokia Siemens said in a statement.

Nokia Siemens said it aims to cut up to 750 jobs in Finland and close one of its sites employing 500 staff in Munich.

It said it had decided to sell a manufacturing site in Durach, Germany -- which employs some 500 employees -- to the plant's current management. It said it would also cut some 50 jobs in Egypt and 20 in the United States.

The telecom equipment market has been in the midst of fierce competition for new business over the last few years and the outlook remains tough.

Research group Dell'Oro expects the 2009 mobile infrastructure market to decline "in the single digits" from this year, while sector leader Ericsson (ERICb.ST) has forecast a "flattish" market.

Mobile phone group Vodafone (VOD.L) said on Tuesday it would seek to cut operating costs by approximately 1 billion pounds ($1.58 billion) per year by its 2011 financial year to offset pressures from cost inflation and competition. NSN Chief Executive Simon Beresford-Wylie declined to comment on the company's outlook, saying it would give further details at Nokia's investor day on Dec. 4, but told Reuters the firm was closely monitoring the economic slowdown.

Nokia shares were down 2.8 percent at 1100 GMT, in line with a weaker sector index .SX8P.

SHARP CUTS

Nokia Siemens Networks -- a 50-50 joint venture between the world's top cellphone maker, Nokia (NOK1V.HE), and German conglomerate Siemens (SIEGn.DE) -- started operations in April 2007 and shortly after launched a large lay-off programme.

The programme, which includes some 9,000 job cuts in total, aims to help boost its operating profit margin to 10 percent by the end of 2009. At end-September, NSN said it had 60,200 staff and had already cut more than 6,000 jobs.

Its underlying operating profit margin fell to 5.1 percent in the third quarter from 6.7 percent in the previous three-month period.

"It's been a very tough couple of years," Beresford-Wylie said.

Nokia Siemens, Ericsson and Alcatel-Lucent (ALUA.PA) are the leading players in the telecoms network market, but in recent years they have been increasingly challenged by Chinese vendors Huawei [HWT.UL] and ZTE (0763.HK). (Reporting by Tarmo Virki; editing by Simon Jessop)