Siemens plans to cut 4,700 jobs
Siemens announced plans to eliminate an additional 4,700 jobs at its Osram lighting unit after it injected €699 million in capital at the subsidiary it is preparing to spin off next year.
The job cuts, primarily outside Germany, come on top of 1,900 positions Osram already cut in fiscal 2012 and will reap €1 billion in cost savings as the market for traditional light bulbs shrinks, the company said yesterday in a statement. Total job losses at Osram will amount to about 7,300.
The measures will cost a “mid- three digit million figure” through 2014, with the savings realised in full a year later.
Siemens said this week that it would spin off Osram next year and retain about a fifth of the company, after realising that investments to keep pace in the lighting market would be too great for the engineering company to shoulder.
Siemens trails Royal Philips Electronics in the market for lighting, which is tilting toward LED technology based on semiconductors.
“Personnel increases in the future fields will only partially compensate for the change in the traditional businesses,” Osram chief executive Wolfgang Dehen said in the release.
Osram had about 39,000 employees as of September 30th. The majority of lighting positions will be lost by selling factories abroad, mainly smaller plants or facilities making products that have reached the end of their life cycle, Osram said.
In Germany, three sites will be affected, including in Berlin and Munich, where Siemens is based. Siemens estimates the total lighting market will grow by about 5 per cent each year to 2016, with the LED market volume to quadruple by then to €37 billion, according to figures compiled by McKinsey.
The market for traditional lighting products will fall by 15 per cent in that time, the data show. Both Siemens and Philips have sought to push into the LED market, with Siemens opening a plant in China that will employ 1,700 people. – (Bloomberg)