Siemens CEO tries to calm furore over job cuts

Fri May 30, 2014 1:13pm EDT
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By Noah Barkin and Jens Hack

BERLIN/MUNICH (Reuters) - The chief executive of German conglomerate Siemens SIEGn.DE tried to calm a brewing storm over job cuts on Friday after he let slip at an investor conference in New York that his plan to restructure the company could put up to 11,600 staff at risk.

Joe Kaeser, who was vaulted into the top job at the Munich-based firm nine months ago, unveiled an overhaul earlier this month that removes layers of management by abolishing a corporate structure, along sectoral and regional lines, that was put in place by his predecessor Peter Loescher.

At the investor conference he was pressed to give more details on his goal to save 1 billion euros annually through the restructuring, and responded by attaching specific job numbers to the scheme for the first time.

"We do away with the four sectors; 7,600 people work in sector coordination, coordinating a middle layer that is gone," Kaeser said, according to a podcast of the remarks posted on the Siemens website. "Another 4,000 people were doing a regional cluster analysis, which is not necessary anymore."

German media jumped on the comments, initially reported by Bloomberg, adding the two figures together and coming up with total cuts of 11,600.

The reaction from powerful German engineering union IG Metall was also swift.

In Germany, staff cuts are traditionally discussed with union members behind closed doors before becoming public. The fact that Kaeser was in the United States talking to investors when he made the comments was all the more galling to workers.

"We are shocked to learn that Joe Kaeser announced in New York that he plans to cut some 11,000 jobs," said Klaus Abel, a union representative in Berlin.   Continued...

A Siemens logo is pictured on an office building of Siemens AG in Munich May 30, 2014.  REUTERS/Lukas Barth