TMCNet:  Siemens to cut 3,800 jobs, move 3,000 more to partners, other units in telecom reorganization

[February 26, 2008]

Siemens to cut 3,800 jobs, move 3,000 more to partners, other units in telecom reorganization

(Associated Press WorldStream Via Thomson Dialog NewsEdge) MUNICH, Germany_Siemens AG said Tuesday it will reorganize its corporate telecom unit, eliminating 3,800 jobs while another 3,000 will be transferred to partners or other units _ its biggest cuts in years.


The company said in a statement that the decision is part of the conglomerate's plan to reorient and restructure its Siemens Enterprise Networks unit, or SEN, and is "intended to accelerate the company's transformation from a hardware supplier to a software and solutions provider to fit changed market conditions."

The cuts will be global and affect nearly 40 percent of the unit's 17,500 workers worldwide. In Germany, SEN employs 6,200 people.

Siemens did not say how much the cuts would cost it, but Dow Jones Newswires, citing a person familiar with the matter, reported that the charge would likely be in the "lower three-digit million euro range."

Shares of Siemens, whose diverse products include trams, turbines and telecommunications equipment, rose 1.9 percent to ?90.41 (US$133.96) in Frankfurt.

"We will begin accelerating the reorientation of SEN and the related restructuring activities under the control of Siemens to ensure that personnel measures associated with these changes will be as socially compatible as possible," Siemens Chief Financial Officer Joe Kaeser said.

According to the company's plans, 2,000 of the 3,800 jobs cut will be in Germany; and of the 3,000 jobs that are expected to transferred elsewhere, 1,200 are in Germany.

Before the move can take place, though, Siemens must hold talks with its unions, a process that Siegfried Russwurm, head of the Munich-based company's human resources, hoped would start soon.

"We want to immediately begin negotiations with the employee side in Germany about settling interests, and hope to conclude these talks as quickly as possible to give employees the greatest possible certainty about what awaits them in the future," he said.

Labor union IG Metall criticized the cuts.

Werner Neugebauer, the head of IG Metall in Bavaria, where Siemens is based, said the company had "no forward looking strategy."

As part of SEN's shift from hardware to software, the unit will expand its operations in Russia and China _ both key markets _ and shed its manufacturing operations.

"We're reaping the first successes of our reorientation as a software provider and the measures initiated in the past _ but the restructuring must be rigorously pursued," said Thomas Zimmerman, SEN's chief operating officer.

He said SEN will sell its Leipzig plant, which employs 530 workers, and its telecommunications cable business ,which employs 60 workers, or funnel it to a third-party partner.

SEN is also seeking a partnership with another IT provider so that its 570 direct sales workers can be shifted to it.

For its international operations, SEN said it plans to sell or find partners for its facilities in Greece and Brazil, which employ 270 and 470 workers, respectively. But Siemens warned that the "possibility of a facility being closed down cannot be ruled out."

Additionally, call centers in Argentina, Chile, Colombia, Ecuador and Peru, which employ some 1,100 workers, will be sold off.

The move is part of Chief Executive Peter Loescher's efforts to reorganize and streamline the conglomerate, which has been wracked by allegations of bribery and fraud.

One of Loescher's goals saw him reorganize Siemens' corporate structure into three units _ health care, automation and infrastructure, and energy.

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AP Business Writer Matt Moore in Berlin contributed to this report.

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