Siemens' Unit to Cut 4,700 Jobs

Light bulb maker Osram, part of Siemens, said plants producing products at the end of their product life cycle or smaller plants with lower sales would face closure.

German light bulb maker Osram, which is soon to be spun off by its parent, engineering giant Siemens (IW1000/34), said on Friday it is planning to cut costs by $1.3 billion by 2015.

As part of the cost-cutting program, the group will sell factories, which will reduce the 39,000-strong workforce by about 4,700 jobs, Osram said in a statement.

Due to fundamental changes in the lighting sector, Osram had already announced in January 2012 that it would adjust its capacities and its workforce "both nationally and internationally by the end of fiscal 2014," the statement said.

As part of those measures, some 1,900 jobs have already been axed worldwide this year, including 300 in Germany.

Plants producing products at the end of their product life cycle or smaller plants with lower sales would face closure, the company explained.

Osram is grappling with a shift in the industry from traditional light bulbs to light-emitting diodes (LED), a technology where Asian rivals have built up capacity and driven down prices.

Osram said it was building up capacities "in future-oriented business areas" and created 200 jobs here in Germany alone last year.

It plans to invest "a low three-digit million euro figure over the coming years in its LED assembly plant in the Chinese province of Jiangsu," Osram said.

"In the final completion stage, 1,700 employees will manufacture products for key segments of the Chinese market and entire Asian region. The region will already account for around half of the global general lighting market in five years' time," the statement said.

Changes in Lighting Sector

Osram quoted a study on the lighting sector by McKinsey which estimated the total market to grow by roughly 5% per year between 2011 and 2016 and the market volume for LED is expected to rise to 37 billion euros by 2016 from nine billion euros last year.

Over the same period, the market volume of traditional products would decrease by 15%, McKinsey estimated.

On Wednesday, parent company Siemens said it would spin off 80.5% of its lighting unit Osram with a view to proceeding with the long-planned stock market listing of the subsidiary later.

Copyright Agence France-Presse, 2012

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