Siemens unable to confirm local job cuts

Siemens Australia is unable to confirm whether local jobs will be axed as part of a global restructure which will see 2400 jobs slashed over the next two years.

By 2007, Siemens aims to slash costs in its poorly performing IT services arm, Siemens Business Services by $2.34 billion (Euro 1.5 billion) with a large chunk of those savings to come from "phasing out 2400 jobs in Germany", according to a press release issued by the Munich-based company.

Asked about job cuts locally, a Siemens Australia spokesperson couldn't rule out cuts or provide specific details.

"There is no official word on any cuts or restructuring locally, but an official announcement is likely to be made in the next week," he said.

Australia has its own executive so any restructuring decisions would be made independently from the German headquarters, according to the spokesperson.

"It is unlikely there will be any impact here as the business in Australia and New Zealand has performed quite well," the spokesperson said.

The company also plans "personnel adjustments" in its loss-making communications division (Comm), which was restructured last year.

However, no details were provided.

Job cuts have been rumored for months at Siemens Business Services, the money-losing IT services arm of Siemens.

In addition, the 60 service locations operated by SBS in Germany, the unit's core market, will be consolidated into 20, said Siemens president and chief executive officer Klaus Kleinfeld announced this week.

After selling its German hardware maintenance and repair unit, Sinitec Vertriebsgesellschaft in March, SBS is now seeking a partner to take over this "product-related service" outside Germany, according to Kleinfeld.

Asked if Siemens would be interested in folding SBS into a joint venture with an international partner, the CEO said the goal is to improve the operating performance of the IT services unit. "Our aim is to strengthen SBS," he said. "Everyone benefits from a stronger SBS."

Siemens also said that Adrian von Hammerstein, the IT service provider's group president, will be replaced by Christoph Kollatz, former head of the Siemens traffic systems division.

Before coming to SBS, von Hammerstein was chief executive officer (CEO) of Fujitsu Siemens Computers, a joint venture between Japan's Fujitsu and Siemens. Kleinfeld said Siemens is looking for a new assignment for von Hammerstein within the group.

Siemens said the company also plans "personnel adjustments" in its loss-making communications division (Comm), which was restructured last year, but provided no details.

The restructuring efforts will focus on the unit's enterprise network division, according to Kleinfeld. This business area has been underperforming largely due to a reluctance of small and medium-size enterprises to invest in new VoIP (Voice over Internet Protocol) systems, he said.

The move to restructure SBS and Comm are among several cost-cutting measures that Kleinfeld has instituted in a bid to make the German electronics giant a leaner and meaner company.

The Comms Group posted a loss of Euro 70 million ($AU110.7 million) for the third quater this year, compared to Group profit of Euro 209 million (AU$330.66 million) in the same period a year earlier. The SBS group posted a loss of Euro 109 million (AU$172.45 million.)

(With John Blau.)

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