Osram to cut 4,700 jobs after spin-off from Siemens
By Maria Sheahan and Jens Hack
FRANKFURT (Reuters) - German lightbulb maker Osram will cut another 4,700 jobs, or 12 percent of its workforce, and sell factories to compete with Asian rivals after being spun off from parent company Siemens.
Osram, which has annual sales of about 5 billion euros ($6.5 billion), said on Friday it wanted to save 1 billion over three years, with half the savings coming from procurement.
The firm, set to be spun off in the spring, has been slow to shift to light-emitting diodes (LED) from traditional incandescent bulbs, while Asian rivals built up capacity and drove down prices.
"We are entering the digital lighting age," Osram chief executive Wolfgang Dehen said, adding new jobs created in the LED field would not be enough to offset the decline in positions in its traditional business.
Siemens itself is spinning off Osram, whose brand is 106 years old, as part of an overhaul of its business which includes a 6 billion euro savings plan that will see it divest less profitable businesses and focus on areas of core expertise.
To that end, Siemens said this week it was to pay 1.7 billion pounds ($2.8 billion) for the rail business of British group Invensys to get better access to customers in Australia, Britain, Spain, and the United States.
Siemens plans to give 80.5 percent of Osram to its shareholders, keeping 17 percent of the business.
Osram aims to boost profitability by bringing new products to market more quickly. It could also buy chips for mass-market LED bulbs from rivals who can produce them more cheaply, while focusing its investment on high-end technology. Continued...