Siemens to cut 600 jobs for outsourcing

FRANKFURT: German engineering group Siemens said that it would cut 500 to 600 manufacturing jobs in Germany at ailing telecoms equipment unit ICN to move production to a lower-cost region, possibly China.

The jobs to be cut are at a plant that makes Internet access devices for high-speed broadband DSL modems in the town of Bruchsal in Germany's southern Baden-Wuerttemberg region.

"We can no longer produce it there at a price that's competitive on the global market," a Siemens spokesman told Reuters by phone. He said ICN was considering moving production to China.

ICN has shed thousands of jobs over the past three years to lower costs as heavily indebted telecoms operators cut investment in new equipment.

It made a small profit in the quarter to December -- its second in a row after two-and-a-half years of losses -- but is still far off its target of reaching operating profit margins of eight to 11 percent by the end of its fiscal year in September.

Siemens said it would do everything possible to avoid compulsory redundancies among its Bruchsal staff, who number some 1,400, but did not rule out that it might have to lay off workers.

The spokesman said the company could move older employees to part-time posts, offer voluntary redundancy packages or move staff to other areas.

Departments such as research and development and manufacturing of smaller, specialized lines, would remain in Burchsal, he said.

© Reuters