Siemens to Lay Off Nearly 8000 Employees

Job cuts are part of a major reorganization that also included the recent separation of Siemens' healthcare business from the rest of the company.

Chris Newmarker

Siemens will cut 7800 jobs worldwide, 3300 of them in Germany, as part of a reorganization of the company that has been taking place for nearly a year, the German multinational behemoth said Friday. The cuts would eliminate 2% of its entire workforce.

The move comes about nine month after Siemens unveiled its Vision2020 concept, which involved streamlining the Munich-based company's portfolio and focusing on the growth fields of electrification, automation, and digitization. The strategy has included creation of a separately managed $17 billion healthcare business.

The company also hopes the cuts will help trim bureaucracy. "Our strategic reorientation has enabled us to considerably streamline our organization and remove entire intermediate levels," Siemens CEO Joe Kaeser said in a news release. "These steps will bring our businesses closer to our customers and make us significantly faster. As a result, certain tasks and functions will be completely eliminated. We're going to tackle this challenge together and implement the resulting measures responsibly."

Siemens had about 343,000 workers as of September 2014, according to its most recent annual report. The company is actually hiring for new positions at the same time that it is letting others go, so its total headcount will remain virtually stable.

Savings will be invested in innovation, productivity and growth initiatives, a considerable part of which will be in Germany. About EUR1 billion ($1.1 billion) is being invested in such efforts in the present fiscal year alone.

For the first quarter ended December 31, 2014, Siemens revenue was up 3% year-over-year on a comparable basis, to EUR17.4 billion ($19.7 billion). But profits dropped to EUR1.6 billion ($1.8 billion), from EUR1.9 billion ($2.2 billion) during the first quarter a year before. The healthcare business only saw a 2% growth in revenue on a comparable basis.

Chris Newmarker is senior editor of Qmed and MPMN. Follow him on Twitter at @newmarker.

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