Siemens to cut 8,000 jobs

SIEMENS HAS identified about 8,000 potential job cuts globally, a number that may reach 10,000 by year-end as chief executive Peter Loescher seeks to boost efficiency, a person familiar with the plan said.

The reductions are the result of a global effort by regional managers to comb through operations and find overlaps in administration at offices worldwide, said the person, who asked not to be identified because the plans are private.

Many of the layoffs may not be made public because they are part of a sweeping push to streamline operations rather than targeted reductions at specific operations, the person said.

Mr Loescher informed the supervisory board at a meeting this week of his effort to overhaul Siemens, and the executive is taking his message to about 600 top managers in Berlin this week to kick off the next fiscal year.

Mr Loescher was forced to lower his earnings target twice this year at Europe’s largest engineering company, as orders for industrial gear waned.

“We fear that any strategy which takes the shape of a glorified cost take-out programme will no longer do the trick,” said HSBC analyst Michael Hagmann.

“Businesses that have neither scale nor recurring revenue need a new strategy or they need to be subject to a strategic realignment.”

Siemens, which makes high-speed trains, turbines and medical gear, is already negotiating job losses at units including transformers and gearboxes in response to slowing economic growth. – (Bloomberg)