The German company is seeking to boost profits and abandon costly projects

Siemens will proceed into 15,000 layoffs

by

Karafillis Giannoulis

30/09/2013 - 1:36pm

 

Siemens, the German multinational engineering and IT firm will proceed into 15,000 layoffs in order to catch up with profitability with US rival General Electric.

Oliver Santen, a Siemens spokesman told Bloomberg that the company will fire 4 per cent of its 370,000 workers worldwide, and a third of the reduction will come in the German home market. According to the US financial news agency, Santen declined to give more regional details. Andreas Willi, a London-based analyst at JPMorgan Chase & Co. told Bloomberg. “If you see a billion euros in charges this year, that pretty much lines up with 15,000 job cuts…There have been charges in drive technologies, power generation and transmissions, so you expect them to bear the weight.”

Of the jobs to be eliminated in Germany, 2,000 are to come in Siemens' industry division, 1,400 in the energy division, 1,400 in infrastructure, and another 200 in the company's corporate division. The cost-cutting program, is known as “Siemens 2014” and it was introduced by former Siemens Chief Executive Peter Löscher with an original target of increasing the company's core operating profit to 12 per cent.

However, a spokesman of Siemens told the DPA news agency that the elimination of the 15,000 job positions doesn't necessarily mean that the employees will lose their job. The spokesman said, “a reduction in one area doesn't necessarily mean the actual loss of a job…as in many cases, workers who saw their jobs eliminated would be offered alternative positions within the company.”

About half of the job cuts in Germany have already been implemented, while the rest are still being negotiated with unions and will include early retirements.         dw de