[January 28, 2005]

Layoffs: Siemens to Cut 1,250 Jobs

BY JOHANNE TORRES

In what the Germany-based company says is a move to strengthen competitiveness in wireline business, Siemens announced today it has plans to lay off about 1,250 employees, who mostly held fixed-line telecom posts. The Siemens Communications Group says it decided to eliminate these positions as it responds to “the continued difficult environment and cost pressure in wireline business [it was necessary to make] adjustments to its product mix and focusing on new fields of growth.”

In a meeting of the Committee for Economic Policy of Siemens AG a concept was presented which visualizes a reduction of around 600 jobs at different locations in Germany. Lothar Pauly, the CEO of the Siemens Communications Group said: “We are open to consultation.” The company confirmed the ongoing reduction of around 100 jobs in central functions of the group at two locations in Munich.

Pauly explained that “the Division Fixed Networks increasingly builds upon a good foundation in its core business and concentrates on expanding voice and data communication systems. At the same time, the focus will specifically be on such new fields of growth as Voice over IP, Ethernet Access, applications and services for broadband networks or Home Entertainment. With this optimization, Siemens intends to further broaden its position as an innovation driver in wireline business. Moreover, it will also be necessary to adjust resources in order to assure the sustained competitiveness of the Fixed Networks Division.”

A Breakdown of the Layoffs

According to Siemens, the Germany reduction of some 600 jobs at three locations in Munich and Berlin is still in discussion: in Munich around 250 jobs at the location Hofmannstrasse and 150 jobs at the location Perlach; in Berlin around 200 jobs. Furthermore, there are plans to reduce further 650 jobs in this division in sales regions outside of Germany.  In addition, a further 100 jobs will be adjusted at the group’s corporate functions in Munich by 2006 – a move that had already been announced last year in connection with the establishment of the group. This will affect the locations in Munich , Perlach and Hofmannstrasse, in equal shares. 

“The planned reduction in force is not necessary the same as layoffs,” stressed Pauly. “Our objective is to transfer the affected employees within Siemens wherever possible or to find socially compatible solutions.” Talks on further ways of accomplishing the reduction in force have now begun with the Works Council and employee representatives. 

Siemens Communications
www.siemens.com