Siemens to cut 4.2 of its global work force

German industrial giant to fire more than 12,000 employees in factories worldwide.

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July 8, 2008 14:30
1 minute read.
Siemens to cut 4.2 of its global work force

siemens 224.88. (photo credit: Courtesy)

Industrial conglomerate Siemens AG said Tuesday it would cut 4.2 percent of its global work force - mostly administrative-related positions - to streamline its operations in the face of a slowing economy. The Munich-based company said besides 12,600 job cuts, another 4,150 positions would be affected by restructuring projects at its various units. That accounts for more than 4 percent of the company's worldwide work force of approximately 400,000 people. Siemens said 5,250 jobs will be cut in Germany - with operations in Erlangen, Munich, Nuremburg and Berlin bearing the brunt of the cuts. Siemens employs approximately 136,000 workers in Germany. The company said the cuts were in an effort to reduce total costs by US$1.8 billion by 2010. "The speed at which business is changing worldwide has increased considerably, and we're orienting Siemens accordingly," said chief executive Peter Loescher in a statement announcing the cuts, which had first been raised last month. "Against the backdrop of a slowing economy, we have to become more efficient," he said. Siemens said it wanted to make the cuts as socially responsible as possible and was considering transfers to other companies, early retirement options and more in a bid to avoid forced layoffs and dismissals. "We want to begin negotiations with the employee representatives quickly in order to make the cuts in a way that will be as socially responsible as possible," chief financial officer Siegfried Russwurm said. "Only as a last resort will we terminate employment contracts for operation reasons." Siemens said the company would also reduce costs further by cutting back expenditures for information technology infrastructure and consultants, and the recent streamlining of its management structure and divisions. For example, the management board has been reduced from 11 members to eight and the company's previous eight divisions have been reduced to just three divisions: energy, industry, and health care. Shares of Siemens were up nearly 1 percent to US$109.85 in Frankfurt after the announcement.


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