Siemens to cut 2,000 jobs at mobile handset unit
By Bettina Wassener in Frankfurt and FT.com staff
Published: April 10 2001 10:28GMT | Last Updated: April 10 2001 12:06GMT
Siemens, the German electronics and engineering group, said on Tuesday it planned to shed about 2,000 temporary jobs, or 25 per cent of staff, at its mobile phone handset production unit in response to falling demand in the sector.
Siemens said it would not extend temporary contracts for 2,000 workers at its three German production sites, which currently employ around 8,000 people in total.
"We plan to not extend these limited contracts to balance out production peaks," said Sabine Metzner, a Siemens spokesperson. "We are taking advantage of the flexibility we have to adjust our manufacturing capacity to the worsened market environment."
The cuts affect workers at plants in Kamp-Lintfort and Bocholt in north-western Germany and Leipzig in eastern Germany, she said.
The move follows similar announcements from rival handset makers, including Ericsson, Alcatel and Motorola, and comes only days after Philips said it was considering disposing of its handset division. Nokia has also announced cut jobs in its networking division and cut its forecast for handset sales growth.
Siemens became Europe's second-largest mobile phone manufacturer behind Nokia earlier this year after Ericsson decided to outsource production of handsets to third parties. But margins at Siemens' handset unit have fallen as competition and marketing expenditure have spiralled.
In February, Heinrich von Pierer, Siemens' chief executive, warned the annual shareholder meeting that continued investment in such high-growth fields, coupled with weaker-than-expected demand for mobile phones, would burden earnings at the group's Information and Communication unit.
Shares in Siemens were up 4.3 per cent at E118.50, as telecoms and technology stocks were broadly in postive territory in early trading in Frankfurt.
You see, the Germans just go there and cut. ERICY agonize and go discuss with the members of the social democratic aprty. Guess who will win? |
