One of Germany’s largest companies, Siemens, said on Tuesday that it would eliminate 16,750 jobs across its operations as a consequence to a weakening business climate. The job reductions — in Germany, the United States and other countries — represent about 4 percent of the Siemens work force.
The healthcare sector intends to cut 1,550 jobs in administration-related functions. Plans call for eliminating approximately 350 jobs in Germany. Most of the remaining cuts will be made in the U.S. In connection with further restructuring measures, a maximum of about 1,250 additional positions will be eliminated – including some 250 in Germany. These cuts are expected to be made primarily in the Imaging & IT and Workflow & Solutions Divisions. Activities will focus on the continued development of future-oriented topics in order to enhance the company’s competitive position in the strategically important healthcare IT business.
In November 2007, Siemens announced its intention to reduce sales, general and administrative (SG&A) costs to a competitive level. Against the backdrop of an impending global economic downturn, plans call for reducing costs in absolute terms by €1.2 billion by 2010. Some of these reductions will be achieved by cutting expenditures for IT infrastructure and for consultants. Savings in personnel are also part of the program to reduce SG&A costs now that the company has considerably streamlined its top management level.
The managing board has been reduced from eleven members to eight and the CEO principle introduced at the levels below. Substantial synergies are also being generated internally following the formation on January 1, 2008 of three new sectors – energy, industry and healthcare – from the company’s previous eight Groups. Siemens is bundling a large number of the administrative tasks of its roughly 70 regional companies into 20 Regional Clusters. By 2010, the number of Siemens’ legally separate entities will have been reduced from approximately 1,800 to fewer than 1,000.