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FRANKFURT— Siemens AG on Friday said it would cut 7,800 positions, or more than 2% of its global workforce, as part of an aggressive plan to reshape the business and cut costs.
The job cuts, of which 3,300 are expected in Germany, will be mainly among administrative and overhead employees, Siemens said. The company’s management and labor council met Thursday.
Nevertheless, Siemens expects the total number of employees world-wide to remain relatively stable. The company has hired more than 11,000 people in just the first four months of its current fiscal year.
The staff reductions, which will be completed within two years, will cost Siemens hundreds of millions of euros, a person familiar with the matter said. The cost includes previously announced cutbacks at the company’s power and gas business, the person said.
The move is a part of a push to cut out bureaucracy and simplify structures to cut operating costs. The targeted savings of about €1 billion ($1.13 billion) will be realized largely by the end of 2016 and reinvested in growth initiatives, mostly in Germany, Siemens said.
“Our Vision 2020 concept will enable us to get our company back on a sustainable growth path and close the profitability gap to our competitors,” Chief Executive Joe Kaeser said, referring to the restructuring program announced last year.
Siemens adopted a new structure in October that pared the number of divisions to nine from 16. Mr. Kaeser told an investor conference last year that organizational changes could affect 11,600 jobs at Siemens, but didn’t say how many jobs would be eliminated.
At the end of first fiscal quarter that concluded in December, the company had around 341,000 employees world-wide, a third of them in Germany.
Write to Neetha Mahadevan at [email protected]
The job cuts, of which 3,300 are expected in Germany, will be mainly among administrative and overhead employees, Siemens said. The company’s management and labor council met Thursday.
Nevertheless, Siemens expects the total number of employees world-wide to remain relatively stable. The company has hired more than 11,000 people in just the first four months of its current fiscal year.
The staff reductions, which will be completed within two years, will cost Siemens hundreds of millions of euros, a person familiar with the matter said. The cost includes previously announced cutbacks at the company’s power and gas business, the person said.
The move is a part of a push to cut out bureaucracy and simplify structures to cut operating costs. The targeted savings of about €1 billion ($1.13 billion) will be realized largely by the end of 2016 and reinvested in growth initiatives, mostly in Germany, Siemens said.
“Our Vision 2020 concept will enable us to get our company back on a sustainable growth path and close the profitability gap to our competitors,” Chief Executive Joe Kaeser said, referring to the restructuring program announced last year.
Siemens adopted a new structure in October that pared the number of divisions to nine from 16. Mr. Kaeser told an investor conference last year that organizational changes could affect 11,600 jobs at Siemens, but didn’t say how many jobs would be eliminated.
At the end of first fiscal quarter that concluded in December, the company had around 341,000 employees world-wide, a third of them in Germany.
Write to Neetha Mahadevan at [email protected]
