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Siemens plans to cut nearly 12,000 jobs

By Alice Ross and Chris Bryant in Frankfurt
Ralph Orlowski | Bloomberg | Getty Images

Siemens is to cut nearly 12,000 jobs as it seeks to restructure its business and halt a slide in profitability against its peers.

Joe Kaeser, who became chief executive last August with the aim of turning around the group's fortunes, told analysts and investors in New York on Thursday that 11,600 positions would be affected. A spokesman said it would try to redeploy workers into other roles, where possible.

The reductions come as Mr Kaeser prepares to fight US conglomerate General Electric for French energy and transport company Alstom.

GE has already made a $16.9bn bid for the power arm of the French company and has promised to create 1,000 jobs within three years of any deal. Siemens has proposed swapping its train businesses with Alstom's energy business to create two European champions in power generation and rail and has said it will make a formal bid before June 16.

Read More Siemens ready to make play in Alstom sweepstakes

Mr Kaeser has promised to protect the jobs of any Alstom workers joining Siemens for three years, prompting German trade unions to call for similar promises for Siemens workers.

Analysts say Mr Kaeser – who promised a period of calm when he took over – needs to keep workers on side as he pushes to overhaul Siemens, with union representatives filling half the seats on the company's supervisory board.

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He announced a further strategy overhaul in May, scrapping the four-sector structure – industry, healthcare, energy and infrastructure – established under ousted chief executive Peter Loescher and consolidating operating divisions as well as seeking a further €1bn in cost cuts.

Read More Immelt rebuffs notion that GE-Alstom deal a 's--- show'

Siemens has been attempting to remake itself as a slimmer company more focused on electrification – from power generation and transmission to factory automation and smart buildings.

Of the 11,600 jobs involved, about 7,600 will be affected by the sector structure changes and another 4,000 because of the unwinding of the 14 regional clusters, Mr Kaeser told the investor event in New York. That follows 15,000 job cuts announced under a €6.3bn cost-cutting programme begun in 2012 under Mr Loescher.

A spokeswoman for the union representing Siemens' workers, IG Metall, said the company had not yet discussed concrete figures with union representatives and it would refrain from making a statement until it had discussed the matter with Siemens.

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