Siemens to cut 16,750 jobs
As Siemens continues its restructuring, it announced plans to cut 16,750 jobs to reduce costs by $1.9 billion by 2010.
Munich, Germany – In efforts to become faster and more flexible, Siemens AG continued its restructuring with a July 8 announcement to eliminate 12,600 jobs, "primarily in administration-related functions." An additional 4,150 jobs will be affected by restructuring projects for a total of 16,750 positions, about 4% of a 400,000 workforce. Sale of its Segment Industrie Montage Services (SIMS) business also is expected.
“The speed at which business is changing worldwide has increased considerably, and we’re orienting Siemens accordingly. Against the backdrop of a slowing economy, we have to become more efficient,” says Siemens president and CEO, Peter Löscher.uickly in order to make the cuts in a way that will be as socially responsible as possible. In this connection, we intend to consider the full range of instruments at our disposal – for example, transfer companies and part-time preretirement schemes. Only as a last resort will we terminate employment contracts for operational reasons,” emphasized Siemens’ chief personnel officer Siegfried Russwurm.
"In November 2007, Siemens announced its intention to reduce sales, general and administrative (SG&A) costs to a competitive level. Against the backdrop of an impending global economic downturn, plans call for reducing costs in absolute terms by€1.2 billion [$1.9 billion] by 2010. [2007 fiscal year revenue was €72.4 billion.] Some of these reductions will be achieved by cutting expenditures for IT infrastructure and consultants. Savings in personnel are also part of the program to reduce SG&A costs now that the company hasconsiderably streamlined its top management level. The Managing Board has been reduced from eleven members to eight and the CEO principle introduced at the levels below. Substantial synergies are also said to be generated internally following the formation on January 1, 2008 of three new Sectors –Energy, Industry and Healthcare – from the company’s previous eight groups. Siemens is bundling a large number of the administrative tasks of its roughly 70 Regional Companies into 20 Regional clusters. By 2010, the number of Siemens’ legally separate entities will have been reduced from approximately 1,800 to fewer than 1,000," the company said.
Siemens provides additional details on the July 8 ; the count includes about 1,800 fewer jobs in engineering and production, primarily in Europe, the company says. Siemens describes itself as "global powerhouse in electronics and electrical engineering, operating in the industrial, energy and healthcare sectors," which includes factory autmation, process controls, and system integration.
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