Siemens to cut 7,800 positions in overhaul
Print Edition
SIEMENS Chief Executive Joe Kaeser applied the finishing touches to his overhaul of the German industrial group with the announcement yesterday of 7,800 job cuts designed to streamline management and speed decision-making.
The roughly 2 percent cut to the trains-to-turbines group’s global workforce will generate productivity gains of about 1 billion euros (US$1.14 billion) by the end of 2016, Siemens said, as the company strives to close a profitability gap with rivals such as General Electric and Switzerland’s ABB.
The profit margin at Siemens’ industrial businesses fell to 10.2 percent in the past quarter, from 11.3 percent a year earlier, against 14.3 percent at ABB and 18.6 percent for GE’s industrial division.
“This completes the restructuring of our company,” said Kaeser, who took over in a boardroom coup in 2013 and outlined his vision for Siemens in May last year.
A senior company source said that the group’s portfolio restructuring is also mostly complete.
Since Kaeser took over, Siemens has agreed to buy US oilfield equipment maker Dresser-Rand and the turbines division of Rolls Royce. It has shed its hearing-aids unit, exited its BSH household appliance joint venture and is hiving off its health care operation as a standalone business.
Siemens said it would reinvest the billion euros of productivity gains in the growth areas of supplying electricity for industrial projects, automation and digitalization, 800 million euros of which will be split evenly between sales operations and research and development. The rest will be invested in fixed assets.
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