By Sheenagh Matthews
June 30 (Bloomberg) -- Siemens AG, Europe's largest engineering company, may cut more than 17,000 jobs to meet a target to reduce costs by 1.2 billion euros ($1.9 billion), according to a person with knowledge of the plan.
The maker of wind turbines and trains, based in Munich, plans to eliminate about 6,400 jobs in Germany and 12,500 administration posts worldwide by 2010, said the person, who declined to be identified because the matter is confidential. Combined, the cuts are equal to 4 percent of Siemens's workforce.
Chief Executive Officer Peter Loescher set the cost-cutting target in April after Siemens reported a 68 percent drop in second-quarter profit. In his first year, the 51-year-old Austrian has pooled nine divisions into three, called energy, industry and health care. The job cuts, designed to help Siemens compete with General Electric Co. and ABB Ltd. as markets weaken, will be made public by a July 7 board meeting, the person said.
``If you look at the savings they've named and do the math, it adds up,'' said Roland Pitz, an analyst at Unicredit SpA, who has a ``buy'' rating on the stock. ``In Germany it's a significant cut.''
Siemens, whose products include light bulbs, medical scanners and trains, fell 0.5 percent to 70.52 euros in Frankfurt trading. The stock has lost 35 percent this year, cutting the company's market value to 64 billion euros.
To contact the reporter on this story: Sheenagh Matthews in Frankfurt at smatthews6@bloomberg.net
Last Updated: June 30, 2008 11:39 EDT |  |
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