Siemens had already said in December it would spin off the division and has raised "the possibility of a stock market listing."
According to the business daily Handelsblatt, a restructuring plan foresees the elimination of at least 1,000 positions at a cost of several hundred million euros.
The division has 35,000 employees, of which around 9,700 work in Germany, which is where trade unions believe most of the job cuts would come, the report said.
SIS sales have fallen for several years, and analysts say its technical staff is better paid than at rivals such as IBM, Hewlett Packard and Accenture.
Overall, Siemens has already spent €500 million to restructure various divisions, and has eliminated 23,000 jobs, employing a total of 405,000 worldwide at the end of last year.
The group's vast operations extend from the manufacture of light bulbs and clothes washers to medical imaging equipment, wind turbines, nuclear reactors and high-speed trains.