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Siemens to cut 16,750 jobs

Siemens intends to make job cuts primarily in administration-related functions, with up to 16,750 jobs affected worldwide.

“The speed at which business is changing worldwide has increased considerably, and we’re orienting Siemens accordingly. Against the backdrop of a slowing economy, we have to become more efficient,” said Siemens President and CEO Peter Löscher.

In Germany, about 5,250 jobs will be affected by the planned personnel reductions. The locations making the biggest contributions will be those with the most employees: Erlangen, Munich, Nuremberg and Berlin. “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. In this connection, we intend to consider the full range of instruments at our disposal — for example, transfer companies and part-time preretirement schemes. Only as a last resort will we terminate employment contracts for operational reasons,” emphasized Siemens’ Chief Personnel Officer Siegfried Russwurm.

In November 2007, Siemens announced its intention to reduce sales, general and administrative (SG&A) costs to a competitive level. Against the backdrop of an impending global economic downturn, plans call for reducing costs in absolute terms by €1.2 billion by 2010. Some of these reductions will be achieved by cutting expenditures for IT infrastructure and for consultants. Savings in personnel are also part of the program to reduce SG&A costs now that the company has considerably streamlined its top management level.

“We want to tackle the necessary restructuring measures rapidly. We’ve informed the employee representatives in detail of our intentions and consulted them on further steps,” said Chief Personnel Officer Siegfried Russwurm.

The Industry Sector is focusing on two measures. With its Mobility in Motion program, the Mobility Division is aiming to reach and sustain a medium-term profit margin of five to seven percent. Measures include establishing standardised platforms. In the course of comprehensive restructuring, a total of 2,500 jobs will be cut worldwide. Some 700 of these jobs are in sales and administrative functions (included in Overview 1), while about 1,800 are in engineering and production, primarily in Europe.

As part of the restructuring program underway at the Electronic Assembly Systems Business Unit (EA) — the company’s pick-and-place machines business — since the fall of 2007, the Industry Sector is planning further measures to safeguard competitiveness. To provide EA with a flexible and effective setup in global competition, 330 jobs — of which 250 are in Germany — are slated for elimination by the end of the year through measures to further simplify processes and streamline the organization accordingly.

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