Siemens AG plans to cut an additional 2,000 jobs at its Information and Communications divisions, bringing the total number of job cuts at the divisions to 8,100, Siemens said Thursday.
The actions are being taken to cut costs and adjust resources and capacities, Siemens said in a statement. In total, the company expects the measures to bring about 1.4 billion euros (US$1.24 billion) in savings.
Layoffs at the Information and Communications Networks (ICN) division, part of the Information and Communications (IC) division, will primarily affect sales and maintenance personnel in the U.S., Germany and other Western European countries. ICN will incur some 250 million euros in restructuring costs, Siemens said.
Thursday's announced cuts come in addition to the 3,500 layoffs at ICN and the 2,600 job cuts at Information and Communications Mobile (ICM), also part of IC, that were announced late April. Siemens is starting to feel increasing market weakness. Hardest hit is the ICM division, which manufactures mobile telephones and mobile phone networks, as well as the ICN division, which makes enterprise networks.
Despite the weakness in the market, Siemens said it is hoping for future growth. Four growth sectors have been identified: broadband access technology, IP (Internet protocol) convergence, mobile networks and devices as well as electronic business products and services.
With sales of over 26 billion euros the IC area accounted for more than one third of overall Siemens sales in fiscal 2000, which ended Sept. 30.
At ICM, earnings before interest, taxes, and amortization (EBITA) in the second quarter of fiscal 2001 totaled only 6 million euros on sales of 2.8 billion euros, Siemens said. The company expects the financial difficulties to continue for some time, saying the market is in a phase of consolidation.
Telecommunication operators are reducing their investments, and the slowing economy, especially in the U.S., is hurting business with enterprise customers, Siemens said. In the second quarter of fiscal 2001 ICN sales came in at 3.1 billion euros, and EBITA was 50 million euros.