Siemens AP staff safe from layoffs

Flagging demand for mobile phones and semiconductors has compelled many European telecommunication firms like Siemens AG to cut jobs.

SINGAPORE--Flagging demand for mobile phones and semiconductors has compelled many European telecommunication firms like Siemens AG to cut jobs.

Last Thursday, the German phone maker said it planned to slash an additional 2,000 jobs worldwide, bringing the total number announced this year to 8,100, or 1.7 percent of its total workforce.

Thus far, the layoffs--to be carried out in the next 18 months--will only affect its info-communications mobile and networks division, a Germany-based Siemens spokesperson said.

However, he added that "at this moment, Asia Pacific will not be affected" by the retrenchment exercise. The latter is mostly expected to be achieved by leaving vacant positions unfilled, discontinuing temporary employment contracts and offering early retirement packages to older employees.

More importantly, it was noted that "no plants in Asia Pacific will be affected".

The spokesperson could not provide the total regional headcount for its info-communications mobile and networks division, or reveal the total number of factories in the region. However, he revealed that the factories were located in China, Pakistan, India, Taiwan and Vietnam.

In April, Siemens reported that profit for the second quarter ended March fell 11 percent to 578 million euros (US$519 million) from the year-ago period. The company did not provide a forecast for the second half as it has yet to figure out the charges it would need to take to cover the cost-cutting efforts.

However, in March, Siemens trimmed its forecast for sales and earnings this fiscal year as demand for handsets and chips weakened.

Mobile phone rivals like Ericsson AB and Motorola Inc also said they would lose money in the coming quarters. In April, Ericsson reported a 4.9 billion crown (US$482.8 million) pre-tax loss for the March quarter and predicted a similar deficit in the second quarter. It is also cutting about 22,000 jobs, or 20 percent of its total workforce, to reduce costs.

Motorola, meanwhile, posted a March quarter loss of US$206 million--its first operating loss in more than 15 years--compared with a profit of US$481 million in the year-ago quarter. Its sales declined 11 percent to US$7.8 billion from US$8.8 billion last year. The company expects sales to rise in the June quarter compared with the March quarter, but noted that loss would widen.

In April, Siemens claimed to have replaced Ericsson as the third-largest mobile phone maker in the world--the first time it had done so. Siemens said it sold 6.9 million mobile phones in the March quarter against Ericsson's 6.2 million units. Nokia took top spot.