FRANKFURT, Germany Industrial conglomerate Siemens AG said Tuesday it would cut 16,750 jobs, or 4.2 percent of its global work force, to streamline operations and cut nearly $2 billion in costs in the face of a slowing economy.
The Munich-based maker of trams and wind turbines said the cuts would include 12,600 administrative jobs as well as another 4,150 positions involving restructuring at its various units. The company has a worldwide work force of approximately 400,000 people.
Siemens said the cuts were being made in an effort to reduce total costs by 1.2 billion euros ($1.8 billion) by 2010.
"The speed at which business is changing worldwide has increased considerably, and we're orienting Siemens accordingly," said chief executive Peter Loescher in a statement announcing the cuts, which had first been raised last month.
"Against the backdrop of a slowing economy, we have to become more efficient," he said.
Siemens said it was considering offering employees transfers to other companies and early retirement packages in a bid to avoid forced layoffs and dismissals.
"We want to begin negotiations with the employee representatives quickly in order to make the cuts in a way that will be as socially responsible as possible," chief financial officer Siegfried Russwurm said. "Only as a last resort will we terminate employment contracts for operation reasons."
Siemens said the company would also reduce costs further by cutting back expenditures for information technology infrastructure and consultants, and the recent streamlining of its management structure and divisions.
For example, the management board has been reduced from 11 members to eight and the company's previous eight divisions have been reduced to just three divisions: energy, industry, and health care.
Siemens said 5,250 jobs will be cut in Germany with operations in Erlangen, Munich, Nuremburg and Berlin bearing the brunt of the cuts. Siemens employs approximately 136,000 workers in Germany.
Shares of Siemens were up nearly 1 percent to 69.97 euros ($109.85) in Frankfurt after the announcement.