Siemens to cut 2,000 German IT jobs

Siemens to cut 2,000 German IT jobs
Siemens employees protesting against cuts in July. Photo: DPA
Industrial giant Siemens said on Wednesday that it would cut 2,000 jobs in its German IT solutions and services (SIS) unit, part of a broader programme initially unveiled in March.

The company and worker representatives have reached agreement on how to implement the decision “in a socially responsible manner,” a statement said.

Offers would be made “for the voluntary termination of employment, ranging from partial early retirement to employment termination agreements,” it added. The group also planned to propose internal reassignments and continuing education.

The decision is part of a broad restructuring of the SIS division announced on March 18 that included the elimination of 4,200 jobs worldwide. Siemens said then that it would restructure the unit around two poles of activity – business information technology solutions and IT outsourcing.

At the end of its fiscal year to September 2009, “the IT business had about 35,000 employees worldwide, of whom slightly less than 10,000 were in Germany,” the statement said.

SIS sales have fallen for several years and analysts say its technical staff are better paid than at rivals such as IBM, Hewlett Packard and Accenture.

Siemens said “the adjustment measures became necessary after revenue in SIS’s personnel-intensive business declined to €4.7 billion ($6.2 billion) in the fiscal year 2009,” an annual decrease of more than 12 percent.

“In the third quarter (to June) of the current fiscal year 2010 alone, SIS reported a loss of €81 million on revenue of €1.1 billion,” the firm said.

Siemens has already spent around €500 million ($660 million) to restructure other divisions and has slashed 23,000 jobs. At the end of last year, its workforce totalled 405,000 worldwide.

The group’s vast operations extend from the manufacture of light bulbs and washing machines to medical imaging equipment, wind turbines, nuclear reactors and high-speed trains.

On June 30, Siemens said it had resumed full-time work schedules at German sites owing to a pick-up in demand.

A day earlier it reported that quarterly sales for the entire group climbed by four percent to €19.2 billion and that new orders had jumped by 22 percent to €20.9 billion, their first increase since the last quarter of 2008.

Siemens shares were down 1.39 percent to €76.71 in late Frankfurt trading on Wednesday, while the DAX index of leading stocks was 0.36 percent higher overall.

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