SIEMENS, EUROPE’S biggest engineering conglomerate, has unveiled plans to slash 4,200 jobs at its information technology unit, helping to set it up for a possible spin-off.
Chief financial officer Joe Kaeser said the 4,200 job cuts at Siemens IT Solutions and Services (SIS) would be made by autumn 2011 and would include 2,000 jobs in Germany. SIS currently has about 35,000 employees, with nearly 10,000 in Germany.
He said Siemens would invest an additional amount of more than €500 million in SIS, which could include acquisitions to boost some of unit’s businesses.
Mr Kaeser also said Siemens would turn SIS into a legally independent business unit by October.
Transforming a business into an independent unit can be the first step in its disposal. Mr Kaeser said making SIS independent would give it more options, but when asked by reporters, he refused to give details or be pinned down on the timing of a decision on the future for SIS. He said only that the focus now was to make it attractive under a new business concept to expand its software solutions and re-train personnel.
Analyst Michael Busse of Landesbank Baden-Wuerttemberg (LBBW) said Siemens wants to get rid of SIS. “SIS is too big to be a niche player and too small to be a global player. It is stuck in the middle. It only had an operating margin of around 2 per cent last year. It is clearly the weakest spot within Siemens,” he said. SIS revenue in 2009 fell 12 per cent to €4.7 billion. Operating profit fell by 38 per cent to €90 million.
Siemens head of personnel Siegfried Russwurm said there were no plans for any more structural changes in the group.
The conglomerate, a bellwether of Germany’s economy for the wide-ranging products it makes, has been undergoing huge restructuring to help it to cope with the global economic crisis.
Siemens completed a two-year global programme in 2009 to trim about 17,000 jobs in administration and sales.
Munich-based Siemens, which employs more than 400,000 people worldwide, including around 128,000 in Germany, has targeted group operating profit this year to drop to €6-6.5 billion from €7.46 billion the previous year. – (Reuters)
