Because of the slowing economy, industrial conglomerate Siemens says it is cutting 16,750 jobs worldwide, with 12,600 mostly administrative jobs, along with another 4,150 positions in a restructuring in some of its units. The cuts amount to 4.2 percent of its 400,000 stuffs.
Chief executive Peter Loescher in a statement said that the speed at which business is changing worldwide had increased considerably, and they are orienting Siemens accordingly, and against the backdrop of a slowing economy, they have to become more efficient. Siemens said the cuts were being made in an effort to reduce total costs by $1.8 billion by 2010.
Siemens announced that it will consolidate its businesses from the current 1,800 separate legal entities to fewer than 1,000 and take its 70 regional companies and transform them into 20 regional clusters. It would also reduce costs further by cutting back expenditures for information technology infrastructure and consultants, and the recent streamlining of its management structure and divisions. For example, the management board has been reduced from 11 members to eight and the company’s previous eight divisions have been reduced to just three divisions: energy, industry, and health care. It is said that 5,260 workers among its 136,000 workers in Germany will be cut.
Its chief financial officer Siegfried Russwurm said they want to begin negotiations with the employee representatives quickly in order to make the cuts in a way that would be as socially responsible as possible, and only as a last resort would they terminate employment contracts for operation reasons. Siemens said it was considering offering employees transfers to other companies and early retirement packages in a bid to avoid forced layoffs and dismissals.
Before this announcement, Siemens has faced a corruption and bribery scandal that emerged in 2006. The company has acknowledged dubious payments, totaling up to $2.04 billion, which were used by the company to secure business as Siemens announced.
Siemens is not alone in announcing major job cuts. A big American airline company is planning to cut 7,000 workers starting Aug. 1.
Popularity: unranked
China Outsourcing
a slowing economy, efficient, job cutting, reconstruction, Siemens
According to a research thrown by Alibaba, 65 percent of its members have potential customers in China, while 22 percent of its members have sold their products in China. The need for some consumer goods, such as foods, high-end textiles and garments importing are increasing rapidly.
Some in the industry see a large market for import as Chinese people’s life taste become more and more internationalized. An increasing number of Chinese companies are purchasing hi-tech equipment and materials as they are trying to move the value chain. So there is a potential market in this sector. Meanwhile, many small and medium-sized foreign brands eager to get into the vast market in China, are expecting to enter China through local traders. One example is a small business which is registered on Alibaba. The company’s employees fly to South Korea to get the latest style design and later sell it to the customers in Shanghai.
Based on the trend, many China exporters shift to imports. A typical example is the experience of Liu Xuefei, a trader in Guangzhou, a southern China city. He halted his jobs of selling Chinese ceramics to Australians and Americans and shift to import wine in 2005. Liu changed his business for two reasons. Firstly, the number of rich people around him is increasing; Secondly the United States was urging Chinese yuan appreciation. And he said he majored in economics, and (based on his knowledge), he felt imports in China would be a promising business.
And his 3-year experience has proved his surmise is right. He now sells wine to Chinese who have started to appreciate the drink, which have been considered a part of Western upper-class lifestyle. For thousands of years, baijiu or white spirits has been the dominant drinking. Now China has become the fastest growing market for wine in the world. Liu’s small company sells nearly 60,000 high-end bottles to Chinese companies, including high-end restaurants, airlines and five-star hotels.
Liu is not alone, an increasing number of small and medium-sized Chinese companies have shifted to imports as China’s exporters grapple with rising costs. This phenomenon can be proved by the information proved on Alibaba’s online platform.
Popularity: unranked
China Economy
China, export, import, increase, shift
On July 7th China Oilfield Services Ltd (COSL) decided to offer 85 kroner a share in cash to buy Norwegian company Awilco Offshore ASA (AWO). The offered price is 18.7 percent over the closing price of AWO shares on July 4.
COSL owns and operates the largest and most diverse offshore fleet in China, including 75 support vessels and four oil tankers, five chemical tankers, 8 seismic vessels and 4 geotech survey vessels. Besides, it operates 15 drilling rigs, including 11 jack-ups and 3 semi-submersibles while operating 1 leased jack-up rig. AWO is an international offshore drilling contractor owning and operating 5 jack-up drilling rigs and 2 accommodation units, another 3 jack-up drilling rigs and 3 semi-submersible drilling rigs under construction, and an option of constructing 2 semi-submersible drilling rigs. The combination of COSL and AWO would create the world’s eighth largest rig fleet, consisting of 34 operated rigs (including rigs under construction) with operation and growth opportunities in most major international markets.
CFO of COSL said that the company is seeking assets in Southeast Asia, the Middle East, Africa, North America and Russia. And the company statement said that AWO’s modern high-specification rigs and cutting-edge technology for offshore drilling was a good strategic fit for COSL pursuant to its globalization and growth strategies. The company’s profit were up 98 percent to 2.24 billion yuan in 2007 on rising business revenue, with four of its main businesses, including drilling, marine and transportation, oilfield technology and geophysical survey hit record high.
China, the world’s second largest energy user, has stepped up its search for oil and gas at home and abroad to sustain its fast growth.
Popularity: 6%
China Business News
AWO, COSL, drilling, energy, rig fleet