Reports: Siemens Plans To Cut 15,000 Jobs Next Year

(RTTNews) - German engineering giant Siemens AG (SI) is planning to cut 15,000 jobs or about 4 percent of their global workforce over the next year, with about 5,000 of them in Germany, to trim costs, according to media reports on Sunday. Siemens employed around 370,000 people worldwide, 119,000 of whom were in Germany at the end of fiscal 2012.

The move is part of the company's Siemens 2014 program announced in November 2012 to cut operating costs over two years in order to become more competitive.

According to the program, the company aims productivity gains of 6 billion euros or $8.1 billion, over two years by the end of fiscal 2014, which begins on October 1. The program also envisages a total-sectors profit margin of at least 12 percent by fiscal 2014. Total Sectors profit margin was 9.5 percent in fiscal 2012.

The current CEO and President Joe Kaeser took over from Peter Loescher on August 1 after the company repeatedly missed profit targets and issued profit warning in late July. Kaeser had until then served as the company's CFO since May 2006.

In late July, Siemens said it no longer expected to achieve a total sectors profit margin of at least 12 percent by fiscal 2014, citing lower market expectations. The profit margin target was part of the company's objective in the Siemens 2014 program that was announced in November 2012.

The job cuts would necessarily not mean the loss of jobs for the employees, but some of them could also be employed in other areas, while most of them would be voluntary departures. In Germany, the jobs cuts would reportedly be seen in the company's industrial, energy and infrastructure segments.

The Munich-based company is said to have already completed negotiations with union leaders on the severance packages for the affected workers and reached an agreement with regard to half of the workers, while a deal could be reached on the other half soon.

SI closed Friday's regular trading session at $121.78, down $0.15 or 0.12% on a volume of 0.22 million shares.