Siemens to Cut 16,750 Jobs

Siemens announced on July 8 that it planned to cut 16,750 jobs worldwide as part of a major restructuring.

Siemens, which employs 400,000 people worldwide, said most of the cuts would be in administration and management services. Of the total, 5,250 jobs would be eliminated in Germany.

"The speed at which business is changing worldwide has increased considerably and we're orienting Siemens accordingly," Siemens chief executive Peter Loescher was quoted as saying in the statement.

"Against the backdrop of a slowing economy, we have to become more efficient," he added.

Among the measures, the group planned to sell its Segment Industrie Montage Services (SIMS) information management division "to ensure the continuation of the unit's service and assembly activities on a competitive basis," it said.

That would affect 1,200 staff at 35 German locations, it added.

Sites that employed the most employees would see the biggest cuts, including German facilities in southern Erlangen, Munich and Nuremberg, and northern Berlin.

"We want to begin negotiations with the employee representatives quickly in order to make the cuts in a way that will be as socially responsible as possible," personnel director Siegfried Russwurm said. "Only as a last resort will we terminate employment contracts for operational reasons," Russwurm stressed.

But the plan quickly drew fire from the trade union IG Metall's Bavarian chapter, with union leader Werner Neugebauer slamming it as unacceptable. "Siemens is in good shape, the order books are full," Neugebauer said. "Against that background, the planned job cuts are neither comprehensible nor acceptable and cuts of this order are totally excessive."

But Loescher said the sprawling conglomerate, which makes products from light bulbs to power stations and trains, had to make up ground lost to rivals such as rival General Electric. He had already set a target of reducing administration and management costs by 1.2 billion euros (US$1.9 billion) by 2010.

Loescher, an Austrian, worked previously at the giant General Electric and is the first Siemens boss named from outside the company. He took over last year to pull Siemens out of a corruption scandal centered on the acknowledged practice of paying kickbacks to obtain foreign contracts. But his approach has rankled some, in particular trade unions that did not appreciate comments Loescher made in a press interview, when he said Siemens was "too German."

Some union representatives have said they might stage strikes to protest the layoff plan announced on July 8, arguing that the company's substantial profits mainly benefit its shareholders.