Siemens Under Pressure

Referring to the state of the world economy and the rising oil price, Siemens chief executive Peter Loescher said it was time for Germany's biggest engineering company to act.

"We have to batten down the hatches," before Siemens caves in under the pressure, the CEO said.

In the comments which are set to be published in full on Monday, Loescher said Siemens needed to reach a target saving of 1.2 billion euros (1.9 billion dollars) by 2010 to remain competitive.

Job cuts imminent

Over the weekend reports were leaked that Siemens planned to cut more than 17,000 jobs from its 400,000 global workforce, including some 6,450 jobs in Germany. The amount -- nearly four percent of the workforce -- was considerably more than the 10,000 anticipated by trade union IG Metall as part of a broad revamp of the company's operations.

The scale of the cuts, which are expected to mainly affect administrative positions, is unprecedented in the 160-year history of the German company. According to the Sueddeutsche Zeitung, the German cuts would be spread over two years and are due to be announced officially in the fall.

In a letter to the employees, Loescher called the restructuring plans the most "extensive in the last 20 years." He added that he hoped the job cuts would be as "socially acceptable as possible."

Siemens, which manufactures everything from hearing aids to nuclear power stations and trains in some 190 countries, posted worldwide sales last year of more than 70 billion euros. But after problems with a range of major projects were uncovered in the early part of the year, the company has been struggling for ways to reform and streamline its production.

Peter Loescher took the helm of the company in 2007 after allegations of bribery on a huge scale forced the resignation of his predecessor Klaus Kleinfeld and the chairman of the board Heinrich von Pierer.