Industrial conglomerate Siemens AG will cut 7,000 jobs from its corporate
telecommunications unit Siemens Enterprise Networks, officials with knowledge of
the plans told The Associated Press on Monday.
The cuts would amount to about 40 percent of the telecom units worldwide work
force of 17,500 people. Four thousand jobs would be eliminated outright while
3,000 other workers would be shifted to other units or to company partners,
according to the officials who asked not to be identified by name because the
official announcement had not yet been made.
SEN designs largescale communications systems for corporations, but has come
under pressure from the availability of cheaper Internetbased telephone systems
which has eaten away at its customer base and sales.
The Munichbased company intends to announce the cuts Tuesday after a meeting of
its economic advisory committee, according to the officials.
The Sueddeutsche Zeitung newspaper reported the planned cuts on Sunday.
Siemens, whose diverse products include trams, turbines and telecommunications
equipment, will eliminate 4,000 jobs in the unit worldwide with 2,000 of those
cuts coming in Germany, its home market, according to the officials. Another
3,000 workers, including 1,000 in Germany, will be shifted to other units owned
by Siemens or to company partners, they said.
Shares of Siemens rose 1.2 percent to close at 88.70 euros ($131.56) in trading
Monday in Frankfurt.
The move is part of chief executive Peter Loeschers efforts to reorganize and
streamline the conglomerate, which has been wracked by allegations of bribery
One of Loeschers goals saw him reorganize Siemens corporate structure into
three units — health care, automation and infrastructure, and energy.
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