Siemens is looking to transfer and eliminate up to 15,000 jobs globally. 5,000 of those positions would be in Germany and another 10,000 around the globe. The cuts would save the company over $8.1 billion once the cuts are completed. While this eases the financial burden for the largest European engineering company, it sends employees home with little options.
Currently, no employees have bee pink-slipped but over the course of the next year, the removal of these employees will be evident. The unions and the administration of the company have sat down to hammer out details of the elimination, including attrition and voluntary severance packages.
Carl, Werner and William Siemen stepped into the engineering business back in the late 1800s. The brothers entered the arena of laying cable lines between the United States and the United Kingdom. The company has long been successfully tied to all things engineering, automation and technology. Just last month Siemens won a $968 million order from Saudi based oil wonder, Saudi Aramco. This continues to shine a light of dismay upon the 15,000 jobs to be eliminated or moved.
Although the company won the giant order bid, financial strife has remained a dominate force in Europe. Siemens is not the only industrial goods company coming under financial stress. General Electric and ABB Group are citing financial concerns as the costs of raw materials continues to rise. Siemens had forewarned analysts their quarterly projections would be lower than expected.
It seems overall Siemens is looking to rebound over a long period of time to become a dominant player once more. Unfortunately, it appears on the path to this rebound, thousands of employees will face the ultimate sacrifice in the financial catch-up. Analysts have concluded the only way for Siemens to step from the shadow of undervalue is cutting costs and selling off assets. It seems cutting costs in the amount of $8.1 billion is a big step for the company.
Earlier this year, rumors began surfacing the engineering firm would release a few thousand jobs to balance its budget. As the troubled financial records continued to surface, a new reality had set in for the company. This summer, Siemens looked to former chief executive Peter Loescher and relieved him of his position from the company. Once the company saw they would not make their profit margin by 2014, immediate changes were demanded.
Loescher insisted his job was not finished, but Siemens pushed the Austrian out in turn for a new look and a rebound of financial profits. The board looked to insider Joe Kaeser and newly appointed CFO Ralf Thomas to take over the reigns. Kaeser and Thomas insisted he had no correlation or support of the former chief and understands the circumstances needed to position Siemens towards a positive financial outlook.
Kaeser and the board were not happy with Loescher’s leadership which saw failed results from solar energy. The investment lead to a loss of over a billion dollars and a final strike against Loescher. The company opted for the first time in its 160 year history to hire from the outside with Loescher. Chairman Gerhard Cromme stated that would not be a repeated mistake.
The company is facing management issues and inner fights since the dismissal of Loescher. It seems Cromme is correct as the board will soon be comprised of an all-male board and only select executives from inside of the company. Now it is up to Kaeser to take over the lead and switch the domino affect of Loescher into a positive. While job cuts are never easy, Siemens is left with no choice but to eliminate up to 15,000 to rebound from a financial loss.