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Siemens To Cut About 1600 Jobs In Diagnostics Unit: Reports

German industrial conglomerate Siemens AG (SIE.DE,SI) is planning to cut about 1,600 jobs in its Healthcare division, reports said Wednesday, citing the unit Chief Financial Officer Michael Sen. The reduction, according to the reports, is a response to Siemens lagging behind industry rivals such as Roche Holding AG (RHHBY.PK).

Sen reportedly said in an interview published in the Swiss business newspaper Finanz & Wirtschaft that the planned cuts will be about 8 percent of workers at the diagnostics subsidiary.

Sen was also quoted as saying that another 400 jobs will go as Siemens stops making linear accelerators that create radiation for cancer treatment. The company will phase out linear accelerators, while it will continue to serve its equipment in operation.

In the recent quarter, order intake and sales at the health-care unit failed to grow and profitability was reduced at the diagnostics business.

"We want to become leaner, while investing in a new platform of products. In diagnostics, we don't want to remain at the level of profitability that we closed at last year," reports quoted Sen.

In the fourth quarter ended September 30, profit at Diagnostics was 63 million euros, compared to a loss of 1.142 billion euros in the prior year, due to impairments totaling 1.204 billion euros. "Operational challenges are expected to continue in coming quarters," the company said at that time.

In November end, Nokia Siemens Networks B.V launched an extensive global restructuring program, including plans to reduce its global workforce by 23 percent or about 17,000 over the next two years. Nokia Siemens is a 50-50 joint venture between Finnish mobile phone maker Nokia Corp. (NOK) and Siemens AG.

The Finland-based joint venture, which is one of the largest telecommunications equipment suppliers in the world, has been a financial burden for both the groups for much of the time since its inception in April 2007.

In Frankfurt's Xetra, Siemens shares are currently trading at 72.3 euros, down 0.85 percent, on a volume of 1.67 million shares.

SI closed Tuesday's regular trading at $95.01 on the NYSE.

by RTTNews Staff Writer

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