Siemens announces job cuts in efficiency drive

TIN news:  SIEMENS announced plans on May 11 to cut nearly 1700 jobs in Germany during the next few years including 300 immediately at Siemens Mobility’s Krefeld train building plant, as part of the company’s efficiency and modernisation drive to turn Siemens into a “digital industrial” company.

Siemens says talks with the relevant employee representatives will begin at once. In addition, about 1000 jobs will be transferred to external service providers in Germany or to other units within the company. Nevertheless, Siemens says it plans to hire around 9000 new employees in Germany at the same time. “Efforts will be made to retrain as many of the affected employees as possible for open positions,” Siemens says.

Siemens Mobility reported a 39% increase in profit to €213m for the second quarter of fiscal 2017 on revenue of €2bn. “However, business units such as Mainline Transport (MLT) and Urban Transport (UT) are struggling with increasing competition and rising cost pressure,” Siemens says. “The aggressive globalisation strategy being pursued by the largest Chinese competitor and overcapacities in the market have resulted in substantial price declines. In addition, more and more infrastructure projects worldwide are being postponed due to restrained public financing in many countries. In this market environment, the competitiveness of future projects can be achieved only through economies of scale and rigorous cost management.”

“Of course, the greatly increased competitive intensity in the worldwide rail business has consequences for us,” says Mr Jochen Eichholt, CEO of the Mobility Division. “To survive in this environment, we have to take action now.”

Speaking during Siemens second quarter results presentation in Munich on May 4, Mr Ralf Thomas, CFO of Siemens, said: “I can only say “no comment” with regard to the most recent media speculations about a merger between Siemens’ rail business and that of one of our competitors. You’re all familiar with the global competitive situation since the merger of the worldwide No 1 and No 2 in the rail market to form the gigantic China Railway Rolling Stock Corporation (CRRC). Further consolidation of the market has been expected for a long time now, and antitrust evaluations of such deals should take a global view of changes in the industry.”

HaCon acquisition

On April 28 Siemens announced plans to acquire HaCon, Germany, which has around 300 employees and is a supplier of planning, disposition and information systems for transport and logistics. “With this acquisition, we’re expanding our offerings with industry-specific software in transport and rigorously implementing our digitalisation strategy,” Mr Roland Busch, CTO of Siemens, said.

“The deal, which is still subject to antitrust approval, is expected to close in the first half of calendar year 2017,” Busch says. “We’ll manage the company as a legally-separate, wholly-owned subsidiary within our Mobility Division.

“More than 100 transport companies in 25 countries already use trip planning software from HaCon as the centrepiece of their travel information systems and applications. For example, German Rail (DB) uses this software for its DB Navigator App.”