Siemens said to plan 7,400 job cuts as CEO Kaeser cuts costs

The cuts, representing about 2% of Siemens’s global workforce, may be announced as early as this week


Siemens’ CEO said last year that it needs to eliminate jobs to slash about €1 billion in costs by creating a leaner divisional structure and simplifying regional operations. Photo: Reuters
Siemens’ CEO said last year that it needs to eliminate jobs to slash about €1 billion in costs by creating a leaner divisional structure and simplifying regional operations. Photo: Reuters

Munich: Siemens AG plans to cut about 7,400 jobs worldwide as CEO Joe Kaeser tries to reduce costs at Europe’s biggest engineering company, said a person familiar with the matter.

The cuts, representing about 2% of Siemens’s global workforce, may be announced as early as this week, two people said, asking not to be identified as the plan is not public yet. About 3,300 of the job reductions may affect Siemens’s German operations, two people familiar with the matter said. A Siemens representative declined to comment.

Kaeser said last year that Siemens needs to eliminate jobs as he seeks to slash about €1 billion in costs by creating a leaner divisional structure and simplifying regional operations. He had said that as many as 11,600 positions could be affected in the overhaul, and that the final headcount loss would be negotiated with labor representatives.

The supervisory board’s seven-person finance committee met today and yesterday to finalize the negotiations, the people said. The committee includes Chairman Gerhard Cromme, former SAP CEO Jim Hagemann Snabe and labor representatives including works council head Birgit Steinborn.

The cuts come at a time when Siemens’ health-care and energy generation divisions, once the prized assets at Europe’s largest engineering company, risk jeopardizing Kaeser’s turnaround plan.

Streamlining Siemens

Profit at the two units fell a combined 27%, dragging overall first-quarter profit down 4.1% to 1.8 billion euros, the company said last month. That’s a far cry from 15 months ago, when those businesses helped offset declines elsewhere at Siemens.

Still, Kaeser has been focussing Siemens on energy generation and supply, buying Dresser-Rand Inc. and the energy operations of Rolls-Royce Holdings Plc last year.

He announced a separate 15,000 job cuts in September 2013, a further 1,200 losses at the power and gas division, and has sold the company’s hearing-aid, hospital IT and microbiology units. About 18% of its 72 billion euros annual revenue is generated by loss-making units, he said last month.

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