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November 13, 2005

Siemens Business Services to cut 3,000 more jobs

Electronics giant Siemens AG has revealed a further 3,000 job cuts at its troubled IT services operation Siemens Business Services GmbH.

By CBR Staff Writer

The cuts come on top of the 2,400 cuts already announced by SBS in September as part of its plan to reduce costs in the division by 1.5bn euros ($1.8bn) by 2007.

An SBS spokesperson had previously told Computer Business Review in October that no further job losses were planned, but the operation has shown no recent signs of improving its financial performance.

Siemens reported its fourth-quarter results recently, and SBS was again one of the weakest performers, reporting an operating loss of 427m euros ($499m) in the fourth quarter compared to a loss of 28m euros ($33m) in the year-ago period.

The operation’s profitability was hit by goodwill impairment of 262m euros ($306m) and a headcount reduction charge of 228m euros ($266m). SBS’s revenue rose 21% to 1.5bn euros ($1.75bn), although new orders dropped 23% to 1.8bn euros ($2.1bn).

In September, SBS overhauled its top management for the second time in 15 months, and revealed plans to reduce headcount at its struggling domestic operation. The company has also been reported to be a possible acquisition target for Paris-based Atos Origin SA.

In more positive news for its parent company, Siemens is selling its 4% stake in Juniper Networks Inc via a placement managed by investment bank UBS. Siemens holds 22.8 million shares in Juniper, which UBS is selling at $23.85 each, valuing the stake at $544m.

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