Siemens AG’s chief executive said Europe’s largest engineering company is to eliminate at least 11,600 positions as it cuts about 1 billion euros (US$1.34 billion) in costs.
The positions include 7,600 that will go as the company streamlines and creates a new divisional structure, plus 4,000 people working in superfluous positions for regional clusterings of countries, chief executive Joe Kaeser told analysts and investors in a Web cast from New York on Thursday.
Some of the employees will be assigned other roles, he said.
Photo: Bloomberg
“A certain amount of people do stuff for coordinating things, analyzing things,” Kaeser said. “About 20 percent of those we believe can be put to work elsewhere, but not there. They can be taken out of the system because the work goes away.”
Kaeser, who was previously chief financial officer at Munich, Germany-based Siemens, started a strategy review soon after becoming chief executive in August last year as he looked to rebuild investor confidence following missed profit targets under his predecessor, Peter Loescher. The resulting plan, revealed this month, will establish nine divisions to replace the company’s previous structure around four sectors.
At the time, Kaeser also said the 167-year-old company would focus on electrification, automation and digitalization, while its healthcare operations would be managed separately. The new setup will cut about 1 billion euros from costs by the end of 2016, Siemens forecast.
“We do not intend to sell the healthcare business, but we are flexible in being prepared for anything that comes along,” Kaeser said on Thursday.
He added that Siemens has invested too much in acquisitions in healthcare diagnostics, which include the 2007 takeover of Dade Behring Holdings Inc for US$7 billion.
General Electric Co is competing with Siemens to buy the energy assets of France’s Alstom SA. Fairfield, Connecticut-based General Electric has offered US$17 billion for the maker of France’s power grid. Siemens has said it plans to present an official bid by June 16.
France’s Alstom has “a good installed base in gas and in steam turbines,” Kaeser said.
The chief executive said he is keen to find more deals like Siemens agreement this month to buy most of Rolls-Royce Inc’s energy assets for US$1.3 billion.
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