Siemens estimated that it would generate around €1 billion in productivity gains from its restructuring measures

Siemens announced its decision to cut approximately 7,800 jobs worldwide as part of its Vision 2020 concept to achieve sustainable growth.

Siemens

The job cuts represent 2% of its workforce globally. According to Siemens, the workforce reduction /will affect 3,300 workers in Germany. The multinational engineering conglomerate emphasized that its global workforce size remain virtually stable.

The company already informed the relevant employee representative regarding the job cuts in connection with its new organizational structure. Siemens CEO Joe Kaeser said, “Our Vision 2020 concept will enable us to get our company back on our sustainable growth path and close the profitability gas to our competitors.”

Kaeser added that the company’s strategic reorientation allowed them to streamline its organization and removes its entire intermediate levels. According to him, “These steps will bring our businesses closed to customers and make us significantly faster.”  He emphasized that Siemens will completely eliminate certain tasks and functions.

On the other hand, Janina Kugel, member of the managing board and labor director at Siemens said the company will now begin discussions with relevant employee representatives to find “socially responsible solutions.” According to her, their agreement to avoid layoffs due to operational requirements still applies.

Siemens Vision 2020

Siemens presented its Vision 2020 concept in May last year. At the time, the company announced its plan to focus its operations on growth areas including automation, digitalization and electrification, and to considerably streamline its portfolio.

The organizational structure of Siemens will become flat and more customer-oriented under its Vision 2020. Siemens already eliminated its sector level. The company is also reducing the number of its business Divisions from 16 to 9 including the separately managed healthcare business.

Siemens would bundle and streamline its cross-company functions and simplify internal workflows and processes. It would also eliminate intermediate levels and transfer more responsibility to the Regions and Divisions to accelerate its decision-making processes.

Siemens expects to achieve $1 billion savings

Siemens estimated that it would generate around €1 billion in productivity gains from implementing those measures in fiscal 2015 alone. The company plans to invest the money in innovation, productivity and growth initiatives.

Siemens will allocate around €400 million for sales operations, €400 million for research and development and  approximately €300 million for fixed assets.