Siemens to slash 15,000 jobs worldwide

German engineering giant Siemens AG plans to cut a massive 15,000 jobs by late next year as part of the company's cost reduction programme in its efforts to improve competitiveness.

Siemens' new chief executive officer Joe Kaesar, who earlier served as its chief financial officer, plans to improve the company's finances through job cuts and sale of non-core assets including airport luggage systems, mail automation and water technology.

"The ongoing and planned workforce adjustments in the context of Siemens 2014 are about 15,000 positions worldwide, of which about 5,000 are in Germany," Siemens said in a statement.

The Munich-based electrical and electronics giant, which has a workforce of around 370,000, has not specified the regions were the other job losses would be.

 The company's former chief executive officer Peter Loescher had to quit just two months ago following his announcement that the company would not meet its profit target of 12 per cent of sales next year.

For the third quarter ended June, Siemens reported a 2-per cent drop in revenue at €19.2 billion, while net income surged 43 per cent to €1.1 billion. However, for the nine-month period, revenue was down 2 per cent at €55.4 billion and net income was up 8 per cent at €3.3 billion.

Return on capital employed (ROCE) dropped from 15.3 per cent to 13.5 per cent for the three quarters.

Siemens' main rivals include US giant General Electric Co and Sweden's ABB Ltd. The company's 2012 profit margin was the lowest among the three with 9.5 per cent. In comparison, General Electric and ABB had margins of 10.3 per cent and 15 per cent respectively.

German redundancies would include 2,000 people at the company's industry division, 1,400 each in the energy and infrastructure units and 200 in administration.

The global job cuts are well above the 8,000 planned earlier in October 2012.

The company has reached an agreement with its unions over about half of the job cuts which are underway, while negotiations are in progress on the other half with options including early retirements.

The company has already divested its lighting business Osram Licht AG and a 50-per cent stake in mobile devices maker Nokia Siemens Networks (See: Nokia to buy Siemens stake in NSN Networks for $2.21 bn).