Siemens to cut many more jobs
Tuesday 06 July 1993
Heinrich von Pierer, chief executive, said cuts of 16,000 jobs worldwide in the year to September, bringing the workforce below 400,000, would be followed by 'a significant amount' of further cuts next year.
Siemens also has some 13,000 employees in Germany on short-time work. The company hopes to cut costs in management and administration by 20-30 per cent in the next few years.
Predicting flat net profits and no dramatic decline in business volume, Mr von Pierer predicted that Siemens 'will come off better this year than many of its competitors'. While income from operating units will fall below last year's level of DM1.4bn ( pounds 550,000), this will be almost compensated for by higher interest earnings from Siemens' DM22bn financial assets. Pre-tax profits were DM3.2bn in 1992/93 on sales of DM78.5bn.
New orders have fallen 6 per cent to DM53. bn in the first eight months of the year, Mr von Pierer said in Copenhagen yesterday. However, sales were up 2 per cent to DM49bn. Siemens expects worldwide sales of more than DM81bn in 1992/93, 4 per cent more than the previous fiscal year.
While benefiting from strong growth in its power generation and transportation businesses, and to a lesser extent public communications networks, the company is still battling against continuing heavy losses in Siemens-Nixdorf computers.
The loss this year will be similar to the DM513m suffered in 1991/92. Mr von Pierer said cost-cutting efforts at SNI had barely kept pace with tumbling product prices and volatile currency markets, which alone will bring SNI an additional deficit of DM1bn this year. He discounted persistent speculation about pulling out of the disastrous business, describing information technology as a 'very important core area at Siemens'.
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