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October 12, 2012

Siemens’ new savings plan to focus on cutting cost

Latest savings programme is aimed to compete with rivals

By CBR Staff Writer

Siemens is intending to focus on reducing production costs and plans further job cuts in a bid to compete with its rivals under company’s latest savings programme.

The firm had failed achieve financial goals as per its ‘One Siemens’ target system during the fiscal year ended 30 September 2012 due to the crisis in the European economy.

The new savings programme, which will be implemented in two years, will reassess the firm’s marketing approach, simplify procedures, remove under performing operations, optimise worldwide infrastructure and monitor facilities that have not been meeting profit prospects.

Siemens president and CEO Peter Löscher said the firm wants to boost with capital efficiency with a revenue goal of €100bn in the medium term.

"This is all set and official. In past years we continually improved the company and reached a profit level that is far higher than the average of past decades," Löscher said.

"In 2011 we achieved record results – in a very good market environment. 2012 was a more difficult year."

The firm said that the programme will not basically modify its basic strategy and structure that include four sectors of energy, healthcare, industry, and infrastructure & cities.

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As part of the programme Siemens is planning to lay off about 8,000 employees globally and the number is anticipated to increase to about 10,000 by the end of 2012.

Earlier, Siemens reported that its revenue for the third quarter of 2012 has increased to €823m when compared to €462m during the same period in 2011.

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