The positions include 7,600 that will go as the company streamlines and creates a new divisional structure, plus 4,000 people working in surplus positions for regional clusters of countries, CEO Joe Kaeser told analysts and investors in a webcast conference from New York Thursday. Some of the employees will be assigned other roles, he said. The planned cuts represent about 3 percent of Siemensís workforce.
ďA certain amount of people do stuff for coordinating things, analyzing things,Ē the executive said. ďAbout 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.Ē
Kaeserís plan to cut jobs at Munich-based Siemens may anger German unions after he promised the French government this month that he would guarantee jobs there for three years if the company buys the energy assets of Alstom. U.S. rival General Electric Co. offered $17 billion for the maker of Franceís power grid and promised the government it will create 1,000 jobs in the country.
Siemens, which plans to make a counterbid by June 16, has proposed swapping its trainmaking business for Alstomís energy assets to create two leading European companies in rail and energy. German union representatives at Siemens this month said such a deal would only be acceptable if the two companies guarantee no job cuts at the units.
Alstom has ďa good installed base in gas and in steam turbines,Ē Kaeser said. The CEO said heís keen to find more deals like the agreement this month to buy most of Rolls-Royce Inc.ís energy assets for $1.3 billion.
The company is negotiating with labor representatives to determine the final number of job reductions. It hasnít given a timeframe for when these talks might be concluded.
Kaeser, who was previously chief financial officer at Siemens, started a strategy review soon after becoming CEO in August as he sought to rebuild investor confidence following missed profit targets under predecessor Peter Loescher. The resulting plan, revealed this month, will establish nine divisions to replace a previous structure around four sectors.
At the time, Kaeser also said the 167-year-old company would focus on electrification, automation and digitalization, and its health-care operations would be managed separately. The new setup will cut about 1 billion euros from costs by the end of 2016, Siemens estimates.
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