Siemens, which employs 400,000 people around the globe, said it would cut 12,600 mostly white-collar jobs. It also plans to eliminate 4,150 jobs as part of an ongoing restructuring process.
"The speed at which business is changing worldwide has increased considerably, and we're orienting Siemens accordingly," Siemens chief executive Peter Löscher said in a statement. "Against the backdrop of a slowing economy, we have to become more efficient."
Of the total number of jobs lost, 5,250 would come in Germany, the company said. Plants in Erlangen, Munich, Nuremberg and Berlin will take the biggest hits.
"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," Siemens Personnel Director Siegfried Russwurm said, AFP reported.
Löscher said the sprawling conglomerate which makes products ranging from light bulbs to power stations and trains, had to catch up with its main rivals, such as the US group General Electric.
Siemens's cost base remains double the size of its competitors' in several areas and the company says it expects the work force reductions to save it €1.2 billion ($1.9 billion) by 2010.