Siemens Announces Restructuring Will Cost 11,600 Jobs

CEO Joe Kaeser of Siemens AG attempted to lower the fears of losses of jobs through a letter to his employees on Friday.

This came a day after Kaeser remarked during a conference of investors that the current affects of the company’s restructuring affected close to 12,000 jobs at the industrial conglomerate located in Germany.

At a New York conference on Thursday, Kaeser discussed the possible effect on the Siemens workforce, the latest of a number of restructuring moves Kaeser has been in charge of during a short tenure.

Regional and organizational changes could make an impact on over 11,600 jobs said Kaeser.

Although the CEO did not say those 11,600 jobs were going to be eliminated, some of the different media outlets reported the jobs would be cut.

In his letter to Siemens employees, Kaeser wrote that the overhaul by the company earlier in May would lead to some changes, but tried to downplay the impact on the overall workforce.

Kaeser took the top spot at Siemens during last summer and in early April outlined a revamp in simplifying structures and costs and boosting competitiveness that amounted to over $1.36 billion.

Part of that included Siemens streamlining management and lowering the amount of divisions the company has from 16 to 9.

Siemens would need to receive approval from the labor representatives at the company, if jobs were to be cut.

The disclosure on Thursday came as a surprise to leaders in labor. IG Metall, the labor union in Germany, which has labor agreements that are binding with Siemens, announced it was not aware of the figure.

Siemens’ last effort of restructuring had a more muted impact on its workforce than what was suspected.

While Siemens has succeeded in lowering the original 15,000 that were targeted, additions in the company meant that from 2012 to 2013 there were only 4,000 net reductions of jobs.

As of September of 2013, when the last fiscal year ended for the company, Siemens employed over 362,000 people.

Possible jobs cuts come as the company evaluates an offer from its energy operations of Alstom a French competitor. Siemens said a deal with the French company would include a guarantee of jobs in France for up to three years.

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