Siemens plans big job cuts (1st Lead)

Business News

Jul 8, 2008, 11:50 GMT

Munich - German electronics giant Siemens AG could face industrial action after it unveiled Tuesday a tough restructuring plan aimed at slashing 16,750 jobs worldwide. The announcement by Siemens chief Peter Loescher that the Munich- based group proposed cutting about 4 per cent of its total global workforce of around 400,000 comes as the company struggles to lay aside a far-reaching corruption scandal. 'The speed at which business is changing worldwide has increased considerably, and we're orienting Siemens accordingly,' Loescher said. 'Against the backdrop of a slowing economy, we have to become more efficient,' he said. The allegations of corruption, which have rocked the more than 160-year-old company, have already led to several resignations among top management, including former chief executive Klaus Kleinfeld. Loescher's drive to trim the workforce is aimed at shoring up Siemens' profitability through a 1.2-billion-euro (1.9-billion- dollar) cut in overheads over the next two years in the face of rising transport and energy costs. The restructuring comes against a backdrop of growing economic uncertainty amid concerns about spiralling energy and commodity prices and the fall-out from the US mortgage market crisis. After talks with the company earlier this week, Siemens union leader Werner Moenius told Deutsche Presse-Agentur dpa that the job cuts were as 'high as feared.' Unions have warned of strike action in the face of a reduction of 5,250 in the domestic workforce. A further 5,150 jobs are to be axed from Siemens' operations across Europe, with another 6,350 jobs being cut from the company's non-Europe business around the world. Last week Moenius described the plans as 'a catastrophe,' adding that they had 'dropped like a bomb' and warned that that industrial action might be necessary. Shortly after taking over from Kleinfeld, Loescher announced plans to streamline Siemens' business operations by splitting the corporate structure group into three divisions, with the group cutting its board members from 11 to eight. Siemens plans to cut 6,350 jobs at its industry unit, 3,950 from its energy operations and 2,800 from it healthcare business, the company said, with most of the job losses in administrative areas.

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Siemens plans big job cuts (1st Lead)

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