Siemens to cut another 4,500 jobs worldwide

Siemens AG, Europe's largest engineering company, plans to cut another 4,500 jobs after second-quarter profit came in lower than what analysts estimated, hit by the declining oil price.

Profit from so-called industrial operations were down 4.9 per cent to €1.66 billion, the Munich-based company said in a statement.

In September the Munich-based electrical and electronics giant, which has a workforce of around 370,000, said in a statement,about 15,000 positions worldwide, of which about 5,000 are in Germany, would be cut (See: Siemens to slash 15,000 jobs worldwide)

The company also plans to sell non-core assets including airport luggage systems, mail automation and water technology.

According to commentators, chief executive officer Joe Kaeser, who is focusing Munich-based Siemens on energy generation and distribution, would need to cut costs as he faced mounting investor pressure after his decision to spend $7.6 billion on the acquisition of oil and gas equipment specialist Dresser-Rand Inc (Siemens acquires US oilfield equipment maker Dresser-Rand for $7.6bn).

The latest round of job cuts takes the total announced since December to 13,100 - representing about 4 per cent of the workforce with Kaeser seeking to achieve €1 billion in annual savings by next year.

Following the dollar-denominated Dresser-Rand agreement in September, the euro had retreated 12 per cent against the dollar and oil has fallen 29 per cent, putting a question mark over rationale of the takeover. Dresser-Rand said 28 February, it would cut 8 per cent of its workforce.

The deal is yet to be approved by the European Commission.

''On balance, the results are 'good enough' in a quarter that was already flagged to be potentially difficult,'' Morgan Stanley analyst Ben Uglow wrote in a note to clients.

Siemens had announced 7,800 cuts announced in February as part of an ongoing restructuring plan. The latest cuts would be in addition to those announced in February.

Some 2,200 of the latest job cuts would be in Germany, the Munich-based firm that employs more than 300,000 people in all said.

In May 2014, Kaeser unveiled a mass streamlining plan aimed at dramatically cutting  both the number of divisions and hierarchy levels within the industrial group by 2016.

The restructuring plan is aimed at producing savings of about €1 billion and boost profitability by focusing on certain divisions, such as energy, medical equipment and digitalised systems for industry and transport.