Siemens AG said on Wednesday it would cut about 2,500 jobs at its Process Industries and Drives division, most of them in Germany, in response to intense competition in the oil and gas, metals and mining sectors.
“Plunging demand in raw materials markets has led to a significant intensification of competition, particularly in Asia,” said Juergen Brandes, head of the Process Industries and Drives division.
The sprawling technology and engineering company plans to consolidate certain activities and adjust the size of manufacturing locations in Europe to improve competitiveness, it said. About 2,000 of the job reductions are in Germany, and half of those will result from bundling specific product lines at individual locations, Siemens said.
“We’ve got to optimize our manufacturing network world-wide and reduce the number of facilities producing similar or identical products,” Mr. Brandes said, though Siemens doesn’t plan to close any current locations.
The German firm has been under investor pressure to improve profitability, and Joe Kaeser has worked to simplify operations since becoming chief executive July 2013. He has since reduced Siemens’s workforce by roughly 13,000 jobs to around 348,000 employees.
Siemens said, however, that the cuts come against a backdrop of wider hiring, as it plans to hire at least 25,000 new employees in the coming years.
By Sarah Sloat
Source: Wall Street Journal
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