Siemens Nixdorf Informationssysteme AG reported figures a day after its parent, showing losses for the year to September 30 equivalent to $321m, down from $489m last time. The company says it will accelerate job cuts this year with its worldwide workforce shrinking by at least 3,400 people. The company says that prospects for itself, and for the worldwide computer business in the current 1992-93 financial year are dim and declined to provide specific forecasts for profit, sales or orders. A tie-up with a foreign major is now on the cards -Siemens has long-standing ties to Fujitsu Ltd, and the company said that while it is not presently in co-operation talks with other companies, such a move is likely if industry problems persist. There are no concrete co-operation talks taking place, chairman Hans-Dieter Wiedig said. However, he added there were considerations under way in some divisions of Siemens Nixdorf on how to improve profitability and the utilisation of factories if the computer industry continues to face weak demand and falling prices. In the event of such co-operation, Siemens probably would not be in a bad position within this sector, he added. As to those elusive profits, With the current situation I do not want to give a forecast for when we will reach break-even, Wiedig said, declining to specify whether Siemens Nixdorf’s sales or orders would increase or decline. According to Reuter, he did not expect any increase in demand and he expected price falls for computer products to quicken from some $440m last year. Siemens Nixdorf’s plan to improve profitability involves a cost-cutting and restructuring programme that should lead to a reduction of some 9,000 jobs by the end of the 1994-95 financial year from 51,600 jobs at September 30 1991. By the end of the current year we will have carried out 6,300 of the planned job cuts, Wiedig said.
Social payments
Siemens Nixdorf’s workforce this year is expected to be cut by at least 600 additional people, up from 200 people last year, due to the general decline in demand for computer products. The cost of social payments to workers laid off as part of the restructuring programme was $94m. The total restructuring programme last year cost Siemens Nixdorf $120m and Wiedig estimated that restructuring costs this year would at least equal last year’s figure. The restructuring programme also involves a rethinking of Siemens Nixdorf’s entire structure with an increased emphasis on splitting the company into business units. It has already created three such units, and Wiedig said he expected another three to be formed this year with the company considering such areas as office automation and retail systems. Last year Siemens Nixdorf also transferred Nixdorf’s 8810 private switching business to the Siemens parent, resulting in an accounting profit of $31m, which makes the reported figures look even worse. Profitability last year at Siemens Nixdorf also improved due to a $331m reduction in stocks and a $357m improvement in the sums owed to it from suppliers. Although it saw a general improvement in incoming orders in the fiscal fourth quarter, Wiedig warned against optimism, attributing this to normal business fluctuations – in the fourth quarter last time, orders were flat, and yet fell 16% in the third and 2% in the second.
