Siemens CEO draws restructuring to a close with 7,800 job cuts
By Jens Hack and Georgina Prodhan
MUNICH/FRANKFURT (Reuters) - Siemens (SIEGn.DE: Quote) Chief Executive Joe Kaeser applied the finishing touches to his overhaul of the German industrial group with the announcement on Friday of 7,800 job cuts designed to streamline management and speed decision-making.
The roughly 2 percent cut to the trains-to-turbines group's global workforce will generate productivity gains of about 1 billion euros ($1.14 billion) by the end of 2016, Siemens said, as the company strives to close a profitability gap with rivals such as General Electric (GE.N: Quote) and Switzerland's ABB ABBN.VX.
The profit margin at Siemens' industrial businesses fell to 10.2 percent in the past quarter, from 11.3 percent a year earlier, against 14.3 percent at ABB and 18.6 percent for GE's industrial division.
"This completes the restructuring of our company," said Kaeser, who took over in a boardroom coup in 2013 and outlined his vision for the company in May last year.
A senior company source said that the group's portfolio restructuring is also mostly complete.
Since Kaeser took over, Siemens has agreed to buy U.S. oilfield equipment maker Dresser-Rand DRC.N and the turbines division of Rolls Royce RRL.L. On the disposal side, it has shed its hearing-aids unit, exited its BSH household appliance joint venture [ROBG.UL] and is hiving off its healthcare operation as a standalone business.