As a result of the cuts, the company claims it will save €1bn which will be invested in innovation, productivity and growth initiatives previously announced, to be realized by the end of 2016.
Vision 2020 concept
In May 2014, Siemens presented its Vision 2020 concept and announced its intention to focus on electrification, automation and digitalization and streamline its portfolio.
Under Vision 2020, the organization's structure will become flatter and more customer-oriented.
Measures already implemented include the elimination of the company's sector level as of October 1, 2014, and reducing the number of company divisions from 16 to nine plus the separately managed Healthcare business.
Michael Friedrich, communications and government affairs internal and external communications, Siemens, told FoodProductionDaily it had informed the relevant employee representatives about the personnel adjustments in connection with the company's new organizational structure and further details regarding implementation will be discussed with the employee representatives in Germany as soon as possible.
“Unfortunately, we cannot provide a more detailed breakdown of the affected jobs by region, location and business,” he said.
In a statement, Joe Kaeser, president/CEO, Siemens said its Vision 2020 concept will get the company back on a sustainable growth path and close the profitability gap to competitors.
'Considerably streamline our organization'
“Our strategic reorientation has enabled us to considerably streamline our organization and remove entire intermediate levels,” he added.
“These steps will bring our businesses closer to our customers and make us significantly faster. As a result, certain tasks and functions will be completely eliminated.
“We're going to tackle this challenge together and implement the resulting measures responsibly. This completes the restructuring of our company in line with the new organizational setup of October 1, 2014."
Janina Kugel, member of the managing board and Labor Director said: "We've made an agreement with the employee representatives that states we want to avoid layoffs due to operational requirements. And of course, this agreement still applies."
Siemens' cross-company functions will be bundled and streamlined more intensively and the company is simplifying internal workflows and processes, from strategic planning to internal reporting.
The savings achieved will be invested in innovation, productivity and growth initiatives, a considerable part of which will be in Germany.
For these initiatives, Siemens will make available more than €1bn in fiscal 2015 alone. Of this sum, about €400m will go for sales operations, a further €400m for research and development, and some €300m for fixed assets.