Siemens to axe another 6,500 jobs

MUNICH, Germany (CNN) -- Germany's Siemens plans to slash another 6,500 jobs at its struggling networks business.

Siemens (FSIE) is the latest telecoms equipment maker to cut jobs after operators like BT Group, France Telecom and Deutsche Telecom cut spending after racking up billions of euros in debts.

Ericsson, the world's biggest maker of mobile phone infrastructure, said earlier this week its would cut another 20,000 jobs. Siemens announced plans last year to cut 20,000 jobs.

The cost of the Siemens' latest job losses, announced on Thursday, and restructuring is expected to be about 300 million euros.

Chief Executive Heinrich von Pierer told CNN the company was making money in other areas, like its transportation business, but admitted the networks operation was struggling. "None of the big telecommunications companies are really growing," he said.

But he offered hope for the future, saying his firm's mobile business was doing "quite well", its handsets were selling and its infrastructure business had grown for the sixth consecutive quarter. "We will exceed significantly the results of last year," he added.

"In the near future 6,500 jobs will be cut. I don't think we have to go beyond this number, at least for the time being."

The Munich-based company posted a strong set of second-quarter results, thanks to its power generation, transportation and lighting business.

Net income for the three months to March 31 soared to 1.281 billion euros from 578 million a year earlier. The result included a net gain of 561 million euros from the sale of part of its stake in Infineon Technologies, Europe's second-largest chipmaker. Sales rose 3 percent to 21.25 billion euros.

Analysts polled by Reuters had forecast sales of 20.26 billion euros, while net income was expected in the 263-984 million euro range.

Siemens stock climbed 3.6 percent to 65.92 euros in early Frankfurt trading on Thursday.

Siemens was able to offset an operating loss of 158 million euros at its networks unit with a better-than-expected profit of 450 million at its power generation unit, up from 129 million in the quarter a year earlier.

French telecoms equipment maker Alcatel posted first quarter net loss of 836 million euros on Thursday and reiterated the gloomy outlook for the telecoms market issued in the past two weeks by Nokia, Ericsson and Lucent.

Von Pierer said Siemens sold 8.3 million handsets in the quarter, up from 6.9 million a year ago, posting a profit of 44 million at its mobile handset and infrastructure business, including restructuring charges of 14 million euros.