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Siemens axes 7,000 jobs from I&S group

01 June, 2002

Siemens is axing around 7,000 jobs from its Industrial Solutions and Services (I&S) group in a bid to boost its competitiveness. The "repositioning" could affect 23% of the group`s 30,000 global workforce, with the biggest cutbacks being in Germany where more than 5,000 jobs could be lost.

The I&S group supplies industrial systems, maintenance services, and IT services for specific sectors of industry, including metals, mining, paper, oil and gas, marine and petrochemicals. In the first six months of the current financial year orders fell by 12% and the group made a €39m loss, which Siemens blames on "structural changes and the current economic slowdown". With its current cost structure, the company says, the group is less competitive than smaller suppliers, especially in the service sector.

"To meet the changed demands of the market and to improve our competitiveness, we have to transform ourselves from a supplier of electrical and electronic equipment for plants, into a provider of solutions and services for industry and infrastructure," says Joergen Ole Haslestad, the group`s new president.

The measures to cut costs and boost productivity have the potential to save more than €500m, he estimates. They include selling off "non-core operations" including repair facilities and PCB manufacturing. Following the reorganisation, Siemens estimates that the I&S group will be able to generate sales of €4bn with a staff of 23,000.

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