Tags: German | Siemens | Eliminate | Jobs

German Industrial Giant Siemens to Eliminate 15,000 Jobs

Sunday, 29 Sep 2013 12:40 PM

Siemens AG, Europe’s largest engineering company, will eliminate 15,000 jobs globally to help rescue a cost-cutting program that cost the previous chief executive officer his job.

A third of the cuts will come in the company’s German home market, Siemens spokesman Oliver Santen said by telephone Sunday. He declined to specify which other regions will be affected by the plan. Siemens has some 370,000 employees.

Former CEO Peter Loescher lost his job following a July 25 announcement that the Munich-based company would not meet a goal of profit representing 12 percent of sales next year. The target, which involved 6.3 billion euros in savings, was part of an effort to catch up with more profitable competitors including General Electric Co. and ABB Ltd.

In Germany, 2,000 employees at the industry division, 1,400 energy sector workers and 1,400 in the infrastructure and cities unit will have to leave, Santen said. Another 200 administrative roles will also be terminated by the end of September 2014. The company had initially planned some 8,000 job cuts globally, a person familiar with the program told Bloomberg in October.

“If you see a billion euros in charges this year, that pretty much lines up with 15,000 job cuts,” London-based JPMorgan Chase & Co. analyst Andreas Willi, who rates Siemens shares neutral, said by telephone today. “There have been charges in drive technologies, power generation and transmissions, so you expect them to bear the weight.”

Early Retirement

About half of the job cuts have already been implemented, while the rest are still being negotiated with unions and will include early retirements.

Joe Kaeser, who was promoted to lead the company in August after working as chief financial officer for seven years, is working to regain investor confidence after five profit warnings and a 22 percent stock decline in his predecessor Loescher’s six-year tenure.

While still CFO, Kaeser said he expected to complete sales of units including airport luggage systems, mail automation and water technology in the fiscal year starting Oct. 1. The divestments follow the spinning off of the Osram Licht AG lighting unit and the sale of a 50 percent stake in Nokia Siemens Networks.

Siemens had a profit margin of 9.5 percent in 2012, while ABB Ltd. and General Electric Co. had margins of 10.3 percent and 15 percent, respectively.

Reuters reported the latest round of planned cuts earlier Sunday.

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Siemens AG, Europe's largest engineering company, will eliminate 15,000 jobs globally to help rescue a cost-cutting program that cost the previous chief executive officer his job.
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Sunday, 29 Sep 2013 12:40 PM
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