Siemens is to cull 6,800 jobs at its troubled corporate telecommunications unit, after announcing last summer that a relatively small 600 would have to go.
Siemens Enterprise Communications division (SEN) plans to cut 3,800 jobs directly, including up to 2,000 in Germany. SEN's headquarters and other administrative and support functions are expected to be hardest hit.
The division has 17,500 employees worldwide.
On top of the layoffs, SEN intends to sell or find partners for some of its facilities, such as those in in Thessaloniki (Greece) and Curitiba (Brazil) which have 270 and 470 employees, respectively. It is also seeking a partnership with an IT provider for about 570 employees involved in direct sales to customers for small and mid-sized systems.
The main reason for the restructuring is that Siemens has failed to find a buyer for its division. When Siemens created a network partnership with Nokia, some of its activities became obsolete. Talks with Alcatel-Lucent, Nortel, and buyout firm Cerburus to sell off these assets led nowhere. However, sources say these negotiations are still ongoing.
"In a dramatically changing telecommunications market for enterprise solutions, this transformation is absolutely essential and supports Siemens' ongoing efforts to find a suitable partner for SEN," the company said in a statement today.
Apart from SEN, another 239 jobs will be go at Nokia Siemens Networks in Finland. Nokia Siemens employs about 5,100 people in that country, including 2,300 in Oulu and about 1,100 in Tampere.
UK union Unite reaction reacted angrily to the move, saying it would challenge any layoffs in the UK. National secretary Peter Skyte, claimed the company was dressing up the divions to make it more attractive to potential buyers.
“The highly skilled Siemens Enterprise Communications workforce in the UK should not be used as poker chips to secure a higher sale price," he said "Unite will challenge any potential redundancies affecting the UK operations in Beeston (Nottingham) connected to this sale.”
The announcements are another painful setback for Siemens. The firm's mobile phone business was sold off to BenQ, and within 18 months found itself bankrupt. At least 3,000 workers lost their jobs.
Also, its enterprise unit was recently at the centre of a corruption and bribery scandal. A court in Munich found that Siemens had bribed public officials in Libya, Russia, and Nigeria in return for the awarding of contracts. ®