The enormous structural problems at Siemens Nixdorf Informationssysteme AG – a moribund proprietary business systems line coupled with the growing threat to Siemens’ own core mainframe business from the accelerating trend towards downsizing and open systems begins to threaten indefinite postponement of financial equilibrium at Europe’s largest computer company. Siemens AG said yesterday that it would take longer than previously planned to reduce losses at its computer and also at its semiconductor divisions, and blamed a continued deterioration in market conditions. The reduction of losses at Siemens Nixdorf is running slower than expected, chief financial officer Karl-Hermann Baumann told a news conference, but declined to say how big the losses at the computer arm are likely to be this year – it depends on how soon the restructuring programme gets underway, he said. In the latest round of restructuring at the company, Siemens wants to cut employment at Siemens Nixdorf to 47,000 from the present 50,000 – but only over an airy next few years. Siemens also says it expects losses at the semiconductor division to go on, saying that the prospects of it breaking even over the next few years as a result of cost-cutting had been dampened by weak demand. Profits at the semiconductor division are also under pressure from the start-up costs of the joint venture memory chip plant near Paris owned by IBM Corp, in which Siemens is the joint venture partner.
