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.

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