| Siemens AG's IT Unit to cut 4,200 jobs worldwide by end-2011 |
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18/03/2010 16:00 (695 Day 20:18 minutes ago) | |||||
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The FINANCIAL -- The German industrial group Siemens announced it would cut 4,200 jobs worldwide by end-2011 at its SIS computer-services division.
The job cuts, of which about 2,000 will occur at locations in Germany, will happen through termination by consent of existing contracts and phasing out of temporary work agreements, Munich-based Siemens said in a statement today, according to Bloomberg. The division employs about 35,000 people globally, and clients include the British Broadcasting Corp.
“We want to put SIS on a solid long-term foundation,” Christian Oecking, the acting chief executive officer of the unit, said in a statement, as the same source reports.
The cuts are aimed at simplifying the structure of information technology operations, Siemens said, adding that it will invest over EUR500 million in SIS by 2012, according to The Wall Street Journal. In the 2009 fiscal year ended Sept. 30, the unit generated revenue of EUR4.7 billion, but achieved only EUR90 million in profit. Siemens has pooled its worldwide IT and software expertise in SIS, which offers IT solutions and IT outsourcing as well as integrated industry software solutions in conjunction with other Siemens Groups.
Siemens also said SIS will be made a separate legal entity effective Oct. 1, a little later than the July 1 date earlier expected, the same source reports. In December, Chief Financial Officer Joe Kaeser said all options for the unit are open, including an initial public offering or a joint venture, amid price and competitive pressures. He declined to provide an enterprise value for SIS.
SIS sales have fallen for several years, and analysts say its technical staff is better paid than at rivals such as IBM, Hewlett Packard and Accenture, according to AFP. Overall, Siemens has already spent 500 million euros (690 million dollars) to restructure various divisions, and has eliminated 23,000 jobs, employing a total of 405,000 worldwide at the end of last year.
The same source reports that the group's vast operations extend from the manufacture of light bulbs and clothes washers to medical imaging equipment, wind turbines, nuclear reactors and high-speed trains.
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