The conversion of Siemens can cost 20,000 jobs – division managers have to decide



According to a press release, the new corporate strategy presented by CEO Joe Kaeser from early August affects several thousand jobs. The plans could make 20,000 jobs superfluous in all major functions worldwide.

According to a media report, Siemens' reorganization could make 20,000 jobs redundant. CEO Joe Kaeser said this in one-on-one discussions with various investors, reports the "Manager Magazin" in his September issue. This only applies to cross-department functions at the head office, such as personnel, finance or law. Kaeser had announced earlier this month in the course of the "Vision 2020+" to remove many of these activities from the head office and move them to the operational units, which need more autonomy. A Siemens spokesman did not want to say whether Kaeser had mentioned the number.

Division heads must decide on dismissal

Hagen Reimer, the Siemens representative of IG Metall, does not believe in a major contraction: "We are convinced by the management that the new strategy is not a capped decommissioning program," he told Reuters. The strategy was unanimously approved by the Supervisory Board – also with the votes of the IG Metall and representatives of the works council. Siemens employs more than 370,000 people worldwide and tens of thousands of works in central functions.

Kaeser has left up to now how he wants to rebuild the central areas and use the employees more efficiently. His goal was to increase efficiency by more than 20 percent in the functions that support operations. Services sectors such as IT or the real estate sector should work 10 to 20 percent more efficiently. Thousands of jobs go to the six major divisions – from Digital Industries "to Siemens Alstom." Kaeser is therefore shifting the decision about the number of employees needed for the division chiefs, and details about their implementation can only be expected next year.

According to "Manager Magazin", the savings in these areas alone should result in a 2% higher return on sales. This results in a savings volume of 1.7 billion euros. The General Works Council of Siemens, Birgit Steinborn, had recently criticized the ongoing restructuring: "These are grueling and irritating people," she tells the Tagesspiegel. In the past four and a half years, the demerger of 30,000 employees and the reduction of 15,000 jobs have been negotiated. Approximately 10,000 jobs have actually disappeared, mainly due to severance payments and partial retirement. Overall, the number of employees at Siemens was in Germany but increased by 3,000 to 117,000.

Gas turbine activities: talks with China are under way

The Siemens boss also had the analysts a solution for the low margin and shrinking activities with large gas turbines in sight, continues the magazine. A partnership for the site, which dismantles 6000 jobs, is being worked on "with high priority". There are high-level talks in China and trust in closing a transaction. The magazine mentions its long-standing partner Shanghai Electric and the SPIC, a state-owned company, with which Siemens recently announced a technological collaboration on an older model of large gas turbines.


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