Siemens Announce Enterprise Comms Re-Organisation

Siemens has put some detail on the news emerging this week that many jobs are to be lost in a re-organisation of their Siemens Enterprise Communications (SEN) division.

In a statement issued today the company says that SEN is to undergo ‘extensive reorientation to meet changing customer needs’. It is not yet know what, if any, the likely impact of the Siemens re-organisation may have on UK operations.

The moves will however see an accelerated transformation by Siemens from hardware supplier to software and solutions provider.

Siemens CFO Joe Kaeser said, “In a dramatically changing telecommunications market for enterprise solutions, this transformation is absolutely essential and supports Siemens’ ongoing efforts to find a suitable partner for SEN. We will begin accelerating the reorientation of SEN and the related restructuring activities under the control of Siemens to ensure that personnel measures associated with these changes will be as socially compatible as possible.”

Planned sales or solutions involving a third party would affect roughly 3,000 employees worldwide, of whom about 1,200 are in Germany. In addition, Siemens plans to cut 3,800 jobs worldwide, including up to 2,000 in Germany. In Germany, SEN’s headquarters and other administrative and support functions are expected to be affected the most.

“We want to immediately begin negotiations with the employee side in Germany about settling interests, and hope to conclude these talks as quickly as possible to give employees the greatest possible certainty about what awaits them in the future,“ said Siegfried Russwurm, head of Corporate Human Resources and Labor Director at Siemens.

The announcement added that more focused investments in innovative product solutions are to be continued, and, among other measures, the company’s market position will be expanded in growth markets such as Russia and China. The shift to software-based solutions also fundamentally changes customers’ requirements for the maintenance of SEN’s products.

As Thomas Zimmermann, COO of the Siemens subsidiary, points out, “We’re reaping the first successes of our reorientation as a software provider and the measures initiated in the past – but the restructuring must be rigorously pursued. SEN will remain a reliable partner for its customers, whom we will continue to serve in the future with our highly innovative products and professional services.”

As it changes to a software provider, SEN will give up its own manufacturing operations. In Germany, plans call for the SEN plant in Leipzig, which currently has about 530 employees, and the telecommunications cable business, with some 60 employees, to be sold or funneled into solutions involving a third party. In addition, SEN is seeking a partnership with an IT provider for around 570 employees involved in direct sales to customers for small and mid-sized systems. This move would enable this sales channel to offer an expended product portfolio in the future so that customers get all solutions from a single source and enjoy greater benefits.

Reinhard Benditte, head of business administration at SEN, noted: “All of SEN’s competitors rely almost exclusively on indirect sales models, which gives them far greater flexibility and a substantially more favorable cost position.”

For its international operations, SEN intends to sell or find partners for its facilities in Thessaloniki (Greece) and Curitiba (Brazil), which have 270 and 470 employees, respectively. The possibility of a facility being closed down cannot be ruled out. Order call centers in Argentina, Chile, Colombia, Ecuador and Peru, which employ a total of about 1,100 people, are not part of SEN’S core portfolio and are slated to be sold.

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