The Chief Executive Officer of Siemens AG – Mr. Joe Kaeser announced at a webcast conference that the company, which is currently the biggest engineering enterprise on the territory of Europe, will cut at least 11 600 jobs. The step is needed, because the company attempts to reduce its expenses by about 1 billion euros (1.34 billion dollars).
Mr. Kaeser said at the conference, which was cited by Bloomberg: “A certain amount of people do stuff for coordinating things, analyzing things. About 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.”
The company is trying to restructure its business and take control of its decreasing profitability. Mr. Joe Kaeser, who took the helm in August 2013, has set the ambitious goal to enter the competition for the purchase of the French energy and transport company Alstom.
The planned lay-offs amount to about 3% of the current workforce of the company. About 7 600 workers will be dismissed due to divisional restructuring, while another 4 000 employees will be fired as Siemens AG is trying to simplify its regional operations. Some employees are planned to be assigned to different positions. The lay-offs follow another 15 000 jobs, which were cut in 2012 during the lead of the former Chief Executive Officer Mr. Loescher, who carried out a 6.3-billion-euro cost-reducing programme.
A spokeswoman of the workers union – IG Metall – commented that the union has not discussed any concrete figures with the official representatives of Siemens AG. That is why she refused to make a statement on the unions behalf until the matter is discussed with the company.
Siemens AG was losing 0.05% to trade at 97.75 euros per share by 13:13 GMT, marking a one year change of +21.9%. According to the information published on the Financial Times, the 26 analysts offering 12-month price targets for Siemens AG have a median target of 106.00, with a high estimate of 135.00 and a low estimate of 88.00. The median estimate represents a 8.38% increase from the last price of 97.80.
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