Siemens AG will terminate its relationship with 2,000 temporary workers in response to a slowing demand for mobile telephones, the company confirmed Wednesday.
Additionally, Siemens will refocus its activities in three German plants. Manufacturing of handsets for the European market will be centered in Kamp-Lintfort, said spokeswoman Sabina Metzner.
Previously, handset manufacturing was spread out over the three facilities. The factory in Bochholt will now focus on cordless products and the Leipzig plant will manufacture plastics for wired phones, Metzner said.
"Last year we saw a peak in mobile telephones, we balanced that out by hiring people on term-limited contracts. Now we are taking advantage of that flexibility by not extending those contracts," said Metzner.
Siemens is the world's fourth-largest mobile phone manufacturer, with an estimated 27 million units sold last year and a worldwide market share of 6.5 percent, according to researcher Dataquest Inc., a unit of Gartner Group Inc.
Metzner is not ruling out that more measures will be taken at Siemens' mobile division, saying: "there can always be more messages (about measures)."
Siemens' competitors L.M. Ericsson Telephone Co., and Motorola Inc. recently issued profits warnings and announced measures, including considerable job reductions, to cope with the slump in the mobile phone sector. Market leader Nokia Corp. last month lowered its sales projections.