Siemens to cut 7,000 jobs

More jobs go at German industrial giant

FRANKFURT, Germany (CNN) -- Germany's Siemens said on Wednesday it plans to cut 7,000 jobs at its loss-making industrial solutions business.

The move by Germany's largest electronics and engineering company is expected to save more than 500 million euros ($464 million), Siemens said in a statement.

While shedding 2,000 jobs, two thirds of which are based in Germany, the company said another 5,000 workers will also be affected as it sells under-performing businesses from its I&S division to its partners.

Siemens's I&S business, which employs about 30,000 people in 49 countries, plans to focus on providing solutions and services to industry, rather than parts.

"With these first steps in our reorganisation, we are on the right track to safeguard our competitiveness and turn our business around," Joergen Ole Haslestad, president of Industrial Solutions and Services Group, said in a statement.

The business, which offers construction services to manufacturers, posted an operating loss of 39 million euros in the quarter ending March 31, 2002.

Its latest round of job cuts come on top of the 20,000 it announced last year to stem losses at its mobile phone and networks business.

Siemen's stock fell 2.3 percent to 69.18 euros in mid-afternoon Frankfurt trading on Wednesday, after falling 3 percent in early trading. The benchmark Xetra-Dax was down more than 1 percent after Deutsche Telekom (DTE) posted disappointing quarterly results.